"The
total complex of the rules according
to which those at the helm employ
compulsion and coercion is called
law. Yet the characteristic feature
of the State is not these rules,
as such, but the application
or threat of violence." ~ Von Mises (indirect reference to the Syndicate maintaining
control of money)

"No
one can possibly know anymore
what the law is, not even experts.
As a result, anyone the State
and/or its minions do not like
can be harassed at will." ~ Acting Man (of Syndicate power and control)

"It
is their insistence on defending Syria which has brought the world from the brink
and forced the US President
to postpone the congressional
vote that he so badly wanted.
Vladimir Putin is trying to stop
a wider war but the Nobel Peace
Prize winning Barack Obama is
trying to start one." ~ Margaret Kimberley (editor, Black Agenda Report)

"It
is fascinating to be alive and
part of the Paradigm Change era.
Barack Obama is just a small
totally irrelevant figure on
the chessboard of history. He
is totally unimportant in a larger
context. The most powerful result
from the Syrian incident is the
fact that the Anglo-American
military power machine has been
completely paralyzed. The
trap was set for them. They did
not understand it and walked
right into the snare. The battle
has now been taken inside the
political structures in Washington DC and the system
will be taken down from the inside.
The Russian GRU/FSB [Main Intelligence
Directorate/new KGB] has vacuumed
the entire NSA database, just
like the Russians vacuumed the
expansive NATO data base when
they captured the Western mobile
communication center in Georgia [SouthWest
Asia]. The United States is defacto
paralyzed in its methods of forcing
their will onto other nations. Russia has asked Germany to
take charge of the on-ground
handling and destruction of the
chemical weapons in Syria.
Assad had insisted that Germany be
put in charge. The UN inspection
team that went to Syria was already led by
German professionals. China also
made it crystal clear that Germany be
put in charge of the operational
aspects of the neutralization
of those weapons. Germany has
accepted. Very interesting shift
in the global power structures." ~ The Voice (with excellent connections
to Russia)

"The
real curse is the drunkenness
with idolization that comes when
a nation is awarded the special
privilege of holding the world's
reserve currency. Joe Paterno
at Penn State University
was awarded the same kind of
privilege. This special privilege
made him feel that he was special
and could overlook his right
hand man Sandusky, who abused the position by humping young boys. America and
its criminally drunk leadership
have been humping the much of
the rest of the world for far
too long now. Ultimately, their
fate will not be much different
than Sandusky's." ~ Rob Kirby

"Putin
just took the high road in Syria
with a clever delayed check move
on the chessboard, and in the
process Obama had his war teeth
removed, while Kerry has been
exposed as bellicose. The USA will have a lame duck
for President for the next 3+
years, longer than any other
previous White House chief. The Cyprus incident
was 90% about cutting off the
Kremlin at the Gazprom knees.
It failed, and Syria is
where Gazprom will find its ascendance
in bringing down the USDollar
through its critical oil sale
payment system called the Petro-Dollar.
The entire Middle East is unstable. Syria is
Obama's Waterloo.
With the Syrian theater in full
view, never has it become more
obvious that the USDollar is
backed by the USMilitary and
brute force." ~ Jackass

"The
only thing necessary for the
triumph of evil is for good men
to do nothing. All tyranny needs
to gain a foothold is for people
of good conscience to remain
silent. The people never give
up their liberties but under
some delusion. When bad men combine,
the good must associate; else
they will fall one by one, an
unpitied sacrifice in a contemptible
struggle. Bad laws are the worst
sort of tyranny." ~ Edmunde Burke (18th century Irish
statesman in British Parliament)

## LAST USDOLLAR DEFENSE IN SYRIA

◄$$$ SYRIA IS ABOUT THE LAST GASP
FOR THE USDOLLAR REGIME AND ITS
DEFACTO OPERATING PETRO-DOLLAR
STANDARD. THE CONFLICT IS ABOUT
THE RISE OF THE NATGAS COOP, THE
ECLIPSE OF OPEC, AND THE CHANGE
IN EUROPEAN LOYALTY. HIDDEN WAS
THE CYPRUS MISDIRECTED ATTACK
AGAINST GAZPROM. THE USGOVT WILL
EXTEND THE ENERGY WARS TO BANK
WARS, CERTAIN TO RESULT IN FURTHER
ISOLATION. $$$

The Jackass perceptions were collected compiled and written in a public article
entitled "Syria, Pipeline
Politics, OPEC, and the USDollar" (CLICK HERE). The entire
story about chemical weapons is
a lie, a fabrication. The chemical
weapons were bought by the Saudis
from English companies, and used
in Damascus, all blamed on the Assad loyalist forces.
Just one more false flag attack,
for which the USGovt is being exposed. The
Syrian pipelines must be stopped,
or else the United States loses Western
Europe to the Gazprom fold. It
is that simple. The rest is distraction
misdirection and deception. Notice England withdrew support for USMilitary action.
They must have received a phone
call from the Kremlin on continued
winter supply. Last year, England signed
a big natural gas supply contract
with Gazprom. The entire Syria
and Cyprus incidents are about
stopping the encroachment of Gazprom
on all of Europe, a captive customer
on the increasingly energy tilted
geopolitical stage. In fact,
it is more a chessboard upon which
the chess master Vladimir Putin
is thriving. Confirmation that
the conflict is about the Gazprom
strangehold of the West has come
quickly. The USCongress is targeting
GazpromBank in a weak gambit that
will also backfire, like all other
energy related geopolitical ploys.
See the Russia Times News article
(CLICK HERE).

Syria is about the last gasp for the Petro-Dollar.
It has been the critical trade
platform for the USDollar standing
four decades, which has locked
global bank reserves in USTreasury
Bonds. The US news networks cannot tell the real story.
They surely tell the USCongress
teams the unvarnished truth about
Gazprom pipeline politics overwhelming
US interests and winning the Europeans
as trade partners. The real focus
is Pipeline Politics and the eclipse
of OPEC. Coming into world view
is the NatGas Coop led by Gazprom.
Expect some not so gentle blackmail
to Europe and Great
Britain. Heading
out is OPEC, and the fracture of
its leader Saudi
Arabia, eventually
the fall of the House of Saud.
Their regime is due to fall or
else to undergo great change, while
the princes abscond with hundreds
of $billions in national resource
wealth and prurient lifestyle.

Coming online is the NatGas Coop, to date not recognized for its potential
power. It has some powerful strange
bedfellows. The Jackass view has
changed. Cyprus was a challenge
to Gazprom, more than a Bail-in
Model. The model serves as
a suicide pact for the West, a
poison pill. They cannot pull that
switch unless major banks are all
dead gone, with millions of private
accounts vaporized. The Western
bankers needed to disguise their
attack of Gazprom, but the Russian
banks were left untouched in Cyprus,
led by GazpromBank. The USGovt
lost on Iran sanctions, causing a tremendous backfire.
The USGovt lost on Iran-Pakistan
Pipeline struggles, pushing the
project into Chinese hands. The
key to the future (the margin of
new power) is the natural gas assured
supply, which will be dominated
by the NatGas Coop. The strangest
bedfellow is Israel, whose Tamar floating platform has committed
surplus natgas to Gazprom, to be
directed toward the Western European
market. Another strange bedfellow
is Qatar, supporter to the anti-Assad
rebel front, but owner of huge
natgas reserves and production.
They want a different gas pipeline
completed, but they will end up
being a Gazprom partner in the
end.

It is game over for OPEC and soon the USDollar global
currency reserve, as the Petro-Dollar
stake will be put in its heart. Not 5% of Americans comprehend the
defacto Petro-Dollar standard
and its importance. The fall
of the Saudi regime is guaranteed
eventually. The Saudis cannot
play both sides (US & Russia)
successfully. They have angered
the USGovt by forging numerous
projects with China like the Western Saudi petro-chemical plant
on the Red
Sea. They have angered Russia by direct threats
posed at belligerent olive branches
delivered at the Kremlin door. The
NatGas Pipelines are critical
and together, the NatGas Coop
will successfully phase out OPEC
in function and importance. What
Saudi Arabia is to OPEC, Russia
is to the NatGas Coop. The
demise of OPEC will deliver a
death blow to the USDollar and
force a catastrophic diversification
out of USTreasury Bonds in banks
across the world, enabling the
birth of the Gold Trade Standard
amidst the ruins and vaccum to
follow. In time, the USTBonds
will be converted by the BRICS
Bank, one of its primary functions
to be. Syria is the last line of
defense for the USDollar.

Notice the G-20 Meetings in Russia were not sabotaged. The
US-UK syndicate was exposed during
the strongarm activity to seek
Syrian War support. The meetings
were great for revealing the
duplicity of the cabal in Middle
East affairs. The BRICS must
do their heavy lifting work without
an organized assembly and the
spotlight of publicity from now
on. Expect the BRICS nations
to continue as they did in early
September, working in summit
meetings, forging deals, organizing
teams, making progress. Next
on their agenda is funds commitments,
platform creation, internal mechanisms,
wiring from trade participants
to peers in payments, and connections
from Gold & Silver to commodity
markets. They are planning for
a post-USD world.

The end result is a more isolated United States. The Russians & Chinese
banded together to block a United
Nations resolution. The USGovt
is losing its United Nations influence. The
team of Russia & China has emerged from deeper broader collaboration. The United
States is
no longer seen as a defender of
freedom, but rather as a continued
aggressor to sustain and to perpetuate
the USDollar regime. Putin was
the winner as Obama looked like
a rank amateur. Obama should hand
Putin his Nobel Peace Prize, a
bought and paid for award with
coercion on Oslo.

The online news journals are picking up on the Gas Pipeline theme and stories.
The bylines tell of the awakening
on the real motive for war. The
proposed pipeline through Iran, Iraq, Syria is
competing with Saudis and Qatar for
$trillions, in simple terms. It
is the basis of an infrastructure
war on the energy front. Syria intervention
plans are fuelled by oil interests,
not chemical weapon concerns. Russia has a weapon in the
Gazprom fortress, has learned how
to use, and it is winning the pipeline
battles. They will lassoo Europe.
See the WND Money article (CLICK HERE).
See the Zero Hedge articles (CLICK HERE and HERE and HERE).
See the UK Guardian article (CLICK HERE).
See the Jesse Cafe Americain article
(CLICK HERE).
See the Quartz article (CLICK HERE).
See the CounterPunch article (CLICK HERE).

A different but parallel perspective is offered by a Hat Trick Letter subscriber.
He wrote, "Always agreed
with you in principle that Syria was
to protect the USDollar. Dig a
little deeper and our Chemical
Weapons dealer has Carlyle group
ties. The Project for the New American
Century (PNAC) is still clearly
in charge even after their boot
from the White House. The House
of Saud needs to bankrupt Iran with
fracking to eliminate competition,
which is why they are trying to
pull backroom deals with Russia concerning
oil. Maybe fracking tech is being
transfered to Putin as well. I
smell a different map behind the
scenes. It adds a few years before
the world economy implodes. If
hyper-inflation worldwide hits
after this excess oil saturates
the market, all that cash from
the USFed bond purchase programs
will drive up low commodity prices." Very
interesting, always deeper than
even the informed perceive.

## INTRO MONETARY FRAGMENTS

◄$$$ PROFOUND PARADIGM SHIFT IS EVIDENT IN JUST THE LAST FEW MONTHS,
AS HISTORY IS BEING MADE, STRUCTURES
SHAKEN, NATIONS WAYLAID, NEW PATHS
FORGED, OLD GUARD SHUNNED. PERCEPTIONS
AND IMPRESSIONS ARE CHANGING RAPIDLY.
$$$

Is it possible that we have witnessed the visible isolation of the banker cabal
over the last few months, a climax
in the last month. It is possible
that numerous developments indicate
vast changes underway. It is possible
that structural transformations
are in progress, old systems shaken.
It is possible that global impressions
are being cast aside, new ones
displacing them, complete with
different perceptions. It is possible
that great weakness is perceived
in former powerful players. It
is possible that exposure of the
Gold/Bank system and its syndicate
has arrived. A grand Paradigm Shift
is evident in just the last couple
months. It is very difficult to
fully comprehend if part of the
movie instead someone seated in
the audience watching the movie.
The same analogy is true of living
in a dome versus outside it. Note
the following.

Total isolation of the United States on Syria (a Jackass forecast)

USMilitary Brass no longer aligned with the White House and banker cabal

The Summers pick at USFed shunned, Goldman Sachs kicked to the curb

Obama ignored at G-20, his policies out of favor with domestic audience

◄$$$ THE UNIVERSAL COMMERCIAL CODE (UCC) IS ALSO KNOWN AS ADMIRALTY LAW.
THE WESTERN WORLD MIGHT BE IN THE
PROCESS OF A GRAND TITLE SWAP FOR
NATIONAL ASSETS AND INCOME STREAM.
NO FIRM RELIABLE SOURCE EXISTS.
WORTH BEING ON THE ALERT. $$$

Regard the following as exposure of a very high level property ownership sequence,
with no way of verification reliably.
A first hint was the DPCC claim
of final ownership on all stock
investments, as no certificates
were handed out, the ownership
murky. The second hint of a devious
sequence was the revelation by
Karen Hudes (formerly of World
Bank) about the Vatican
claims to all US-based income tax
stream through the IRS. The banker
cabal originally set up the US
Federal Reserve in 1913, to run
the banking system under the appearance
of an organization dedicated to
the United States interests. Little known was
that after the collapse of the US system
in 1929, the United
States filed
for bankruptcy in 1933 in Basel
Switzerland with the Bank For Intl
Settlements. Against the wall of
bankruptcy, the US switched
from civil to admiralty law. The
nation pledged all assets including
lands, parks, ports, buildings,
in return for continuation. It
was essentially the highest level
of financial fraud, done through
the legal system, with hardly anyone
on the street noticing. Then in
1971, after the Bretton Woods Accord
was broken, the Gold Standard was
gone. The floating currency system
was launched into the volatile
seas of liquidity laced with sponsored
corruption. The Federal Reserve
Note is the fake money item, the
standard of paper currency to fill
the pockets of the people, to satisfy
as legal tender by fiat decree.
It appears the BIS is the uber-lord.

The people have been turned into debt slaves, having lost their home equity,
otherwise known as the inflation
hedge. Their stock accounts including
those locked in pension systems
have dubious ownership. Their main
investments have a false money
foundation in the USDollar itself,
all at risk. They are discouraged
from ownership of Gold & Silver.
It might someday be clear whether
the American natives, who work
to maintain themselves (with food,
housing, education , retirement)
in life, have their assets actually
owned legally by another entity
without their knowledge. Think
the highest echelon in bankers
and Vatican. The title swap is truly beautiful in
its perversity, if real and valid. The
courts at the ground level have
been applying the civil code of
law. Quietly, at the highest levels,
the system has been converted to
the commercial (government contract)
law, without people noticing it. It
this case, if effective, if actually
applied, it is a very subtle, very
profound, and very ugly, a veritable
application of The Matrix. The
final owners would be the bankers,
the Jesuit bankers, the castle
dweller uber-lords. Nothing is
perfectly clear.

◄$$$ THE 911 CONTROVERSY WILL NOT GO AWAY. ON THE TWELFTH ANNIVERSARY
OF THE COUP D'ETAT AND MASS MURDER
INCIDENT, COMPLETE WITH OFFICIAL
COVERUP, THE PATH TO JUSTICE HAS
BEEN VERY SLOW. THE 911 INSIDER
TRADING INCIDENT HAS BEEN REVISITED.
FOLLOW THE MONEY. THE DESTINATION
OF THE LOOT FROM THE WORLD TRADE
CENTER BANK IS UNKNOWN. THE AFTERMATH
OF THE 911 EVENT NULLIFIED THE
CONSTITUTION AND BILL OF RIGHTS,
AND PAVED THE ROAD TO A FASCIST STATE
WITHOUT CHALLENGE. $$$

The first questions that arise on the financial path to justice should be centered
upon the destination of the World Trade Center
bank vault contents. Few people
realize it was the biggest bank
in New York City at the time, a bank used by countless participants in
world trade. Thus the target to
steal $100 billion in bearer bonds,
$100 billion in gold bars, and
$100 billion in diamonds. The bonds
and gold were known long ago, but
the diamonds were made known to
the Jackass only four years ago.
The source was a man with USMilitary
and USGovt security agency background,
who knew people involved in moving
the diamonds. The families of the
victims have seen no satisfaction
in numerous attempts to publicize
the cut cord in the line of justice
and investigation of a long list
of anomalies. A couple of unresolved
issues remain on the table, related
to the attacks of September 11th
of year 2001. The Commission Report
is as bland and absurd as the Warren
Commission in 1964. Both were hastily
assembled, both with barred evidence,
both with ridiculous untenable
conclusions made before the evidence
was presented and examined. In
fact, both have another lethal
aspect in common. Most all witnesses
on the Grassy Knoll of Dallas in
November 1963 met with violent
or mysterious deaths. In the last
12 years, a great many witnesses
at the base of the World Trade Center
have met with violent or mysterious
deaths.

The firm Jackass belief is that the same organization is responsible for the
JFKennedy assassination and for
the WTC attack with related bank
heist, even the abrogation of the
Bretton Gold Standard, all three
pillars of systemic change. It
is the banker cabal, the syndicate
that controls the banks, the military
defense contractors, the security
agencies, the pharmaceutical giants,
and the press networks. The Wall
Street bankers always wanted a
70-story building complex on the
site, a complaint stated openly.
They will see it built, under construction.
A victim of the WTC destruction
was an enemy of Wall Street, a
Swiss re-insurance firm. Leave
it there.

The two unresolved incidents pertain to stock trading and money supply growth. The
informed trading on advance knowledge
was directed at the airline stocks. They
had a 5-sigma rise in shorted
options trading volume. They
were obscenely profitable for
certain Wall Street and London
banks. Also, the USFed under
Greenspan saw fit in advance
to order the astounding increase
of currency in circulation a
few weeks prior to 911. No
investigation of the former has
come. No explanation of the latter
by the knighted former chairman
has come. One should always be
seeking for a rationale of why
Canton Fitzgerald moved their
data storage location to New Jersey six months before the 911 attack. Two Hat Trick Letter
clients have good friends warned
on September 10th not to show
up at work the next day, calls
received anonymously. See the
Lars Schall article (CLICK HERE)
and the YouTube video (CLICK HERE).

High praise and respect should go to the AE1000 organization of one thousand
architects and engineers. They
have pressed onward about a long
list of anomalies and inconsistencies
such as the presence of thermite
in the rubble, which is a sophisticated
explosive. They have pointed out
that jet fuel burns at 1000 degrees
Fahrenheit below the required temperature
to alter structural steel. Inquiring
minds are till looking for aircraft
debris on the Pentagon lawn. At
least one hundred other items could
be cited. The oddest anomaly is
that car and truck engine blocks
were melted within a three or four
block radius of the WTC buildings.
Expert analyses have concluded
that thousands of micro nuclear
devices were part of the demolition,
the radiation fanning out. Most
early responders at the scene have
developed cancer. The most obvious
smoking gun is the collapse of WTC Building #7 without
any airplane impact or fire. The
building was the site of JPMorgan's
data storage records on the Enron
failure and USTreasury Bond counterfeit
trail. Leave it there.

In the Jackass opinion, the position on 911 separates the morons (who do not
comprehend much) from the masses
in denial (who refuse to examine
evidence) from the mindless patriots
(who salute the captured flag)
from the inquisitive patriots (who
reject the official story) from
the angry betrayed citizens (who
observe a coup d'etat). Those who
seek the truth (aka Truthers) have
been denigrated. After all, truth
is the enemy of the fascist state.
Hope is an expensive and elusive
commodity. Action and preparation
are better pathways. Justice is
too much to expect. Rather, expect
the criminals in power to be displaced
or to vanish.

◄$$$ OPEN INTERIOR CONFLICT AT THE WHITE HOUSE. A DEEP DIVISION HAS COME
BETWEEN SYNDICATE LOYALISTS AND
THOSE WHO PLEDGE SERVICE TO THE
PEOPLE AND CONSTITUTION. THE DIVISION
IS OUT IN THE OPEN. THE OBAMA ADMIN
IS TRAVELING ON A PATH OF NATIONAL
ISOLATION IN A GLOBAL SENSE. $$$

The conflict is all through the USGovt and the USMilitary and the US Security
Agencies. The Snowden files have
brought much division into the
open like a hot knife. The topic
is beyond the scope of the newsletter,
but some comment is required. The
numerous security and intelligence
agencies suffer from a gross gulf
in priorities from the two camps.
To put it simply, the bad side
is led by the National Security
Agency. The good side is led by
the Defense Intelligence. The Black
Hats are driven by the huge narcotics
profits and pervasive bank fraud
with monetary control. The White
Hats are driven by devotion to
the Constitution and commitment
to protect and serve the populace.
Lately, a division has been given
more attention by the Pentagon
Brass and the elite soldiers whose
lives have been trampled. Much
more could be told about the dismissal
of General Patraeus. Much more
could be told about the several
generals and admirals and the fateful
flight one week before the Oklahoma
City 1995 incident. They wanted
to restore the Republic. On the
anniversary of 911, the Russia
Times released a story about the
CIA involvement of the 911 attacks,
an inside job, a false flag. The
RTNews called it another Operation
Gladio Project, which is well known
for its subterfuge in Europe,
for which not 1% of Americans have
any knowledge. Let it be known
that President Obama does not have
Pentagon support. He is gradually
giving the Joint Chiefs of Staff
at the Pentagon reason to distrust
his priorities, service, and leadership.
NATO Secretary General, Anders
Fogh Rasmussen, has stressed that
NATO forces are not in support
of the Obama Admin either. See
the Zero Hedge articles (CLICK HERE and HERE).

◄$$$ USMILITARY COMPLEX AND HOMELAND SECURITY FORM A GIANT PORTION OF
RECENT USGOVT SPENDING. IT IS A
BUBBLE THAT MUST POP. ALTHOUGH
THE DEFENSE BUDGET IS ALREADY COMING
DOWN, IT IS STILL ALMOST DOUBLE
WHAT IT WAS IN 2002. THE HOMELAND
BUDGET IS THE LITTLE MONSTER, THE
GESTAPO CREDIT LINE, THE CHERTOFF
SLUSH FUND. $$$

It is highly doubtful that either budget will be reduced substantially as the
police state continues, as the
USDollar is rejected globally.
The disorder rises both within
the crumbling financial framework
as well as the deteriorating economic
structure. How few remember the
Eisenhower warning in the 1950
decade about the sprawling encroachment
of the military industrial complex,
whose wishes, plans, and ambitions
seem never to be refused. He foresaw
a growing tyrant. Nowhere is it
more evident with the powerful
defense contractors and the Chertoff
Group. See the Zero Hedge article
(CLICK HERE).

◄$$$ THE WORLD BANK WHISTLEBLOWER BELIEVES THE WORLD WILL REJECT CENTRAL
BANKERS AND THEIR CRIMINAL DASTARDLY
SCHEMES. MANY INSIDERS ARE WORKING
TO EXPOSE THE CRIMINAL BANKER ELITE,
THEIR HIDDEN WAYS, AND THEIR DETRIMENTAL
PROJECTS. $$$

Karen Hudes is on a tear, offering interviews, at personal risk. She is a former
economist at the World Bank, who
left the devious organization a
couple months ago amidst great
fanfare for her negative views
on the bank and central banks and
bankers themselves. She mentioned
that other World Bank insiders
are extremely disenchanted with
the course of events, and are helping
to bring facts to light that expose
the nefarious banker deeds and
harmful effects to the global financial
system. Hudes offered a stern warning.
She concluded, "Fiat currencies
are now under siege. We have a
limited amount of time to set up
alternative monies. If we have
permanent Gold backwardation, international
trade will simply stop and we will
have a world depression that will
make what happened in the 1930s
and 2008 look like nothing." She
offered numerous important points
in an interview with Smart KnowledgeU
(CLICK HERE).

The important banker figures migrate from one bank to another, sometimes
to regulatory agencies and commissions.

The big banks slowly acquired the news networks, constantly alter the
stories, keep the masses ignorant,
and make sure that internal critics
are fired.

Many bankers understand that a day of reckoning is coming. The populace
in many nations is awakening
to their criminal deeds, more
aware of the broken central bank
franchise system.

The BRICS nations of the East are moving fast away from the current banking
and financial system, in broad
attempts to settle trade on a
net basis in gold bullion.

If the power transition is not resolved in the current transition by bringing
the major parties together, then
war is inevitable. Great wealth
lies in the balance.

For continued background reading on the currency wars and struggles to maintain
the bank reserve system, Hugo Salinas
Price has provided some solid analysis.
No equilibrium can be achieved
without major systemic reforms.
The centralized banking and financial
rules inhibit progress, and even
inhibit capital formation. The
foced valuation of currencies,
bonds, and gold is very destructive.
Only Gold can serve as money (surely
not debt), and only Gold can serve
as the ultimate enforcer of value.
See the Cafe Americain essay (CLICK HERE).

◄$$$ THE FOCUS IS TO SHIFT TO USGOVT DEBT CEILING AND USFED CHAIRMAN
WITHIN THE UNITED STATES. IN THE
BIGGER PICTURE, THE CENTRAL BANK
CULT IS UNRAVELING AS THE FRANCHISE
SYSTEM IS UNDERGOING BROAD FAILURE.
THE USFED AND USMILITARY FIND THEMSELVES
IN THE SAME POLICY ROOM, NEITHER
WITH AN EXIT. IT COULD BE THAT
NOBODY WANTS THE JOB OF FINANCIAL
CAPTAIN OF THE USS TITANIC. A CLOSER
LOOK SHOWS SUMMERS AND YELLEN TO
BE NEARLY IDENTICAL, EXCEPT FOR
PERSONALITY. $$$

With the news that Lawrence Summers has taken his hat out of the USFed Chairman
ring, the focus has shifted. (His
hat was kicked off.) Veteran Fed
Governor Janet Yellen is the front
runner for the post. However, the
key question is whether she is
stupid enough to pursue or accept
the job. An embarrassing situation
might develop where nobody wants
the post, regarded possibly as
the captain of a gigantic sinking
vessel abandoned by most global
players with disdain. The USFed
is beset by a crippled balance
sheet loaded with toxic bonds,
the buyer of last resort throughout
the financial crisis over five
years. The USFed is under fire
for raising the cost structure
worldwide, including food prices
across the vast array of poorer
nations. The USFed is being
dragged into global conflicts,
as the Monetary Policy is intertwined
with Military Policy on the geopolitical
stage, both offering aggression,
both perceived as global problems,
neither having an exit strategy. The
USFed is stuck, and is likely to
preside over the systemic failure
that accelerates into a climax.
Expect some additional shift of
attention to the USGovt debt ceiling.

The Jackass view is that the offer for the Chairman post must come with sweeteners
and additional lures. There must
be promises that the Greenspan
and Bernanke policies killed the
structures and caused the systemic
failure. The next Chairman will
preside over ruin, a gigantic toxic
balance sheet, a forced QE to Infinity
and ZIRP Forever twin-cam Weimar
engine block. The guarantee to
hold ZIRP & QE in place until
an economic recovery is a death
sentence, since the policies assure
continued capital destruction of
the engine room with the ObamaCare
marginal business tax imposition
as a ruinous engine additive. The
dubious Quantitative Easing, also
known as hyper monetary inflation,
and as QE to Infinity by the Jackass,
will be firmly in place. The leading
analysts expect the QE tapering
process to happen more slowly if
at all. The USFed Chairman post
will preside over systemic failure
and Weimar
printing practices made very apparent,
possibly with grand lies tied to
the office. See the Financial Sense
article by James Gruber (CLICK HERE).

Yellen might be regarded improperly as the big monetary dove in the room. Although
Summers is painted as an architect
of dismantling the Glass-Steagall
Act that used to separated the
banks, brokerage, and insurance
businesses, the shredding of this
important firewall took place under
the Democratic guise of the Clinton-Rubin
Admin. On the other hand, Yellen
has made it somewhat clear (as
clear as monetary policy makers
ever do) that she wants no harsh
budget austerity, and wishes to
maintain so-called stimulus even
at the risk of fast growing money
supply. The only reality might
be more that Summers is hawkish
and Yellen dovish in public demeanor
and comportment, since their monetary
policies might be very much on
the same wavelength. The former
is a disliked boisterous arrogant
loudmouth, the latter a reserved
articulate toilet trained professional.
Both bankers believe the market
requires intervention. Both have
no preference for full deregulation.
Both are ultimate insiders, as
Yellen was a firm fixture on the
Council of Economic Advisors. So
out with the controversial ass,
and in with the clueless dove.
See the Fortune Magazine article
(CLICK HERE).

## USFED FAILED POLICY

◄$$$ MONEY SUPPLY IS FALLING ACROSS THE BOARD. STARK EVIDENCE OF NO ECONOMIC
RECOVERY AND CAPITAL DESTRUCTION
IS THE DECLINE. FOCUS WILL GROW
ON USFED POLICY AS PART OF THE
PROBLEM. $$$

The side effect from hoarding the monetary growth within the privileged financial
sector, and thus restricting monetary
growth into the Main
Street business centers, has become
very evident. The M3 Money Supply
measure cannot reach the 2004-2006
levels. The M2 and M3 actually
show very slow growth, but M1 is
in fast deceleration. The current
monetary policy with 0% and bond
purchases (ZIRP & QE) is not
producing a recovery, a revival,
or any resuscitation whatsoever.
If new money is devoted only for
the banking sector, then the rest
of the business sectors suffer.
Witness some nasty consequences
of capital destruction due to ZIRP & QE,
which have lifted the cost structure,
reduced profit margins, and forced
widespread job cuts and business
shutdown. Next comes the deep damage
from ObamaCare and the slam effect
with job cuts.

◄$$$ MONEY VELOCITY REMAINS CRIPPLING LOW, AT HISTORIC LOWS. THE AMPLIFIED
MONETARY EXPANSION HAS AIDED BANKS
AND REDEEMED BONDS, BUT WITH NO
TANGIBLE BENEFIT TO THE USECONOMY.
MANY ARE THE CHANNELS FOR MONEY
FLOW, BUT MOST ARE BLOCKED. AS
CAPITAL IS KILLED OR RETIRED FROM
THE USFED MONETARY POLICY, THE
MONEY VELOCITY DECLINES. IT IS
PROOF OF CAPITAL DESTRUCTION. $$$

The Money Velocity is at historic lows, a point of extreme
embarrassment to USFed Chairman
Bernanke, who is on the way out
with failure on his resume. Worse,
the outcome of four years with
extraordinary money growth has
been a crippled USEconomy. The good chairman quack argued in
his doctoral thesis that amplified
liquidity was the basis of the
emergence from the Great Depression.
Yet amplified liquidity cannot
lift the United States from its chronic recession, deeply
mired in insolvency. Perhaps
because first, it is a depression,
and second, the absent Gold Standard
provides no traction for new
money. Next on the global
stage will be the USFed serving
as the processing plant for the
USTBonds returned to sender from
a vast stream of foreign entities. Still
the funds will not hit the US Main Street, but rather foreign business investment and development.
Just like with toxic bonds, the
redeemed Fannie Mae Mortgage
Bonds or AIG-held derivatives
never aided the USEconomy. They
served as accounting entries
and payoffs to preserve the current
power structure. The foreign
dumping of boatloads of USTBonds
will have to be redeemed just
like the toxic bonds.

The money flow has numerous textbook channels, of which at least five are important
channels. They are 1) redeemed
toxic bonds without price inflation
effect, 2) business capital expansion
for a massive typical effect which
is not happening, 3) USGovt deficits
and its moderate effect when infrastructure
which is not happening, 4) Wall
Street and financial account expansion
for a tiny effect that offers psychological
lift to consumers, and 5) Military
spending for a profound deficit
effect that harms twice with capital
destruction. Be sure to know
that fast reducing money velocity
is the most reliable signal of
deep recession and economic danger.

The nation seems to completely accept the notion of the USFed monetary policy
being a radical stimulus that runs
the risk of promoting extreme price
inflation. The truth is the exact
opposite. No stimulus, when
in fact the QE bond monetization
will continue to kill capital and
destroy business. The price inflation
effects are all over the board,
with material costs rising, service
costs rising, but liquidation sales
throughout the field of view in
a suppressive cross current effect. The
same incorrect stimulus propaganda
has been spouted for months on
end, actually over three years
steadily like a propaganda loudspeaker.
However, almost no economists comprehend
the capital destruction and severely
harmful effect from the USFed policy.
The sequence is simple, from rising
cost structure, poor pricing power,
shrinking profits, ruined business
segments and even entire businesses,
then shut down of equipment and
liquidated capital. The ongoing
QE will ensure the USEconomy continues
to deteriorate, with more acceleration
coming. Those who expect a rise
in business activity are way off,
bordering on delusional. Those
who expect the money velocity to
rise are way off, bordering on
clueless.

The essentials and life necessities for households are a flat constant. One
must integrate the USDollar devaluation
into the formula for prices. It
is the new factor coming into relevance
within a year or more. Many people
remain stuck with hyper monetary
inflation as a dreaded fear from
the USFed in focus. The current
environment is in no way similar
to past cycles. China is
the new player, which prevents
both rising product prices and
capital investment. The price inflation
monster is corralled with redemption
of toxic bonds. The nation might
indeed see some fast rising prices
where shortages abound. The psychological
factor might surprise the Jackass,
as it enters into the equation,
it will be regarded as price gouging.
My 15% for price inflation sudden
shock is a baseline stab for price
hikes in a quantum jump after the
30% USDollar devaluation is forced.
The Jackass does not wish to enter
into silly math syntax game discussions
on devaluation and price inflation
calculus, which diverts from the
main point. Clearly a big USD devaluation
would result in an amplified large
price jump. For example, a 25%
devaluation brings a 33% price
jump. A 33% devaluation brings
a 50% price jump. A 40% devaluation
brings a 67% price jump. A 50%
devaluation brings a 100% price
jump.

Soon the obvious step will come of a USDollar forced into a split of a foreign
version and a domestic version.
It will be a major news item and
source of deep confusion and controversy. The
foreign reserves holders will demand
a preserved foreign held USDollar,
as protection from the USFed itself
and its powerful hyper monetary
inflation. The foreign USDollar
version will emerge as distinctly
different. The domestic version
will be devalued repeated to the
point of being recognized finally
as a Third
World currency. The new USDollar
for domestic usage must trade on
the FOREX currency market, where
it will be brutalized. After the
baseline 15% price inflation is
embedded, next comes the follow-up
effects like extreme shortages.
The rest of the world will eventually
reject the USDollar for trade. Shortages
will result from the transition
where foreign suppliers will be
uncertain of the new USDollar value.
The shortages will be most acute
at supermarkets for food, at service
stations for gasoline, and at ATMachines
for cash. These three locations
is where to expect the most violence.

◄$$$ LAGARDE ADMITTED UNCHARTED TERRITORY IN ACKNOWLEDGING THE CURRENT
MONETARY EXPERIMENT. RECOGNITION
OF THE HIGH RISK AND DESTRUCTIVE
EFFECTS HAS BEGUN. THE CHOICE IS
FOR CONTINUED GRADUAL HIDDEN DESTRUCTION
VERSUS RAPID DESTRUCTION IN FULL
VIEW. THE CENTRAL BANKERS HAVE
NO CREDIBILITY ANYMORE. $$$

Chrisinte Lagarde is no fool, but she might be a tool. She certainly is a system
harlot. She has for the last two
years held the dubious managing
director post at the International
Monetary Fund. It is a job for
a half-blind bureaucrat in service
to the bank syndicate, since the
IMF itself has lost its clout.
It has moved slowly under the Chinese
aegis, by virtue of the bigger
fund input donations from Beijing. With cash input comes power. She recently stated, "The
day will come when this period
of exceptionally loose monetary
policy must end. We need to plan
for that day, especially since
we do not know exactly when it
comes. Just as with entry, exit
will take us into uncharted territory.
Let me say it up front: I do not
suggest a rush to exit. Unconventional
monetary policy is still needed
in all places it is being used,
albeit longer for some than for
others." The apologists
for the current policy have no
legs to stand on, their integrity
shredded long ago, as a result
of ongoing massive banker welfare
and favors.

Lagarde advised the continuation of highly destructive
monetary policy, for the simple
reason that its removal would
cause a fast decline, massive
lost wealth, and engrained chaos.
So she chooses slow destruction
over rapid destruction during
which no solution is pursued. Her
words sound as stupid as delusional.
She spoke to the global gathering
of central bankers hosted by
the US Federal Reserve in Jackson
Hole Wyoming.
They are criminals by most definitions,
deeply involved in concealing
bond fraud, working avidly in
redeeming and retiring toxic
and fraudulent bonds with other
people's money, shuffling around
bank derivatives while managing
them in secrecy, and chronically
getting hands dirty from high
volumes of money laundering in
narco funds. See the UK Telegraph
article (CLICK HERE).

◄$$$ CHICAGO FED'S EVANS SEES A REDUCTION IN USFED BOND PURCHASES BY
YEAR END 2013, AND A FIRST RATE
HIKE IN LATE 2015. THE REALITY
(JACKASS FORECAST) IS FOR A DOUBLE
IN USFED BOND PURCHASE VOLUME BY
NEXT YEAR. ALWAYS BEST TO DISREGARD
SUCH OFFICIAL VIEWPOINTS. $$$

Chicago Fed President Charles Evans has added to the lunatic propaganda. He
expects the USFed to bring an end
to its bond purchase plan by the
middle of 2014, and to order its
first rate hike in late 2015. He
actually anticipates a tapering
of QE later this year. Evans estimates
the USFed balance sheet will reach
$4 trillion by the time QE3 ends.
Being a hack economist, he stated
that low interest rates provide
a necessary support for economic
activity at this stage of the cycle.
He fails to see rising cost structure,
shrinking profitability, and business
shutdown, all part of capital destruction.
He is a blind man serving as policy
apologist wonk. See the Market
Watch article (CLICK HERE).

Recall the regular spouted misdirected propaganda in the last decade, centered
upon nonsense like the Second Half
Recovery, later followed by Green
Shoots nonsense, then by Exit Strategy
distractions. It is all mindless
chatter. So the QE tapering will
be next year. The Jackass
forecast is for the USFed volume
of bond purchase to double in the
next several months. The
embattled central bank must absorb
the heavy volume of USTBonds returned
to sender from foreign entities,
whether in diversification of reserves
or in Indirect Exchange stemming
from large asset acquisitions.
Expect the USFed to talk about
reductions while increasing volume
in huge amounts, the public stated
policy all lies. The heightened
volume will be done in secrecy,
fully denied. Intrepid analysts
will catch their lies in the data.

◄$$$ GOLD REPATRIATION CAMPAIGN IS ABOUT TO BE LAUNCHED IN POLAND AGAINST
THE BANK OF ENGLAND.
A PETITION IS GATHERING FOR OFFICIAL
INQUIRY OF STATUS AND VOLUME CONCERNING
THE POLISH GOLD HELD IN LONDON.
DITTO JUST TWO WEEKS LATER FOR
A SIMILAR POPULAR MOVEMENT IN FINLAND. THE LILLIPUTIANS
ARE BEGINNING TO TIE DOWN THE WICKED LONDON GIANT. $$$

Taking inspiration from Germany, a movement to repatriate national gold
reserves has arisen in Poland,
the gold bullion supposedly held
vaults at the Bank of England in London. The movement is called Oddajcie Nasze
Zloto (Give Our Gold Back) and
was brought to the attention of
GATA by its vice chairman Piotr
Wojda. Their intelligentsia
is worried about the safety of
more than 100 tons of Polish gold
held in the vaults of Bank of England for
the last 70 years. The Polish people
want their gold returned from London. Wojda informed that the movement has
been widely supported by organizations
such as the Ludwig von Mises Institute,
the Business Center Club, the Mint
of Wrocaw. The requisite publicity
was given by several newspaper
publications and television shows.
The national Polish politicians
finally took action. Wojda wrote, "Representatives
of the movement met with members
of the Polish Parliament on August
29th to discuss doubts regarding
the safety of Polish gold held
abroad. During our presentation,
we used several examples of similar
movements in Germany, Switzerland,
and the United States. We also briefly
presented achievements of the Gold
Anti-Trust Action Committee and
they impressed our members of Parliament.
The members of Parliament agreed
that Polish gold reserves deserve
an independent audit."

The petition will be put before the president of the Polish Central Bank, Professor
Marek Belka. The petition will
stipulate that official inquiries
be made as to the volume of Polish
gold reserves held at the Bank
of England, their quality, including
serial numbers, purity, and status
as good delivery bars. They
wish to know if any independent
audits have taken place within
the last 70 years, with their results.
They wish to know details of any
official leasing of such gold to
any financial institutions, and
if so, under what terms and conditions.
The Polish central bank has gold
reserves that amount to only 4%
of the bank's total currency reserves.
See the GATA article (CLICK HERE)
and the the Polish "Give
Our Gold Back" campaign's
Internet site (CLICK HERE).

The Polish Govt decided to confiscate half of the national pension funds, in
order to reduce the sovereign debt
burden. It was an extraordinary
maneuver, surely not a decision
favored by the populace. One must
wonder if they will seize another
10% of the pension funds to cover
next year's deficit. They could
instead cut the budget and encourage
private business formation, maybe
even attract some foreign investment.
See the Zero Hedge article (CLICK HERE).

A gold repatriation movement has sprung up in Finland just
two weeks after such a movement
arose in Poland. The objective is simple: To execute
a referendum, the purpose to
determine the will of the people
of Finland concerning the return of gold reserves
back to Finnish soil. The time
for the vote is at the latest
May 2014. Gold is a strategically
important asset, useful as insurance
for the country to support its
currency system. Gold is the
tool with with to emerge from
currency crises, as history has
shown. Finland owns 49.1 tons
of gold, stored mostly at the
Bank of England. It
is actually located in several
sites across the world. The majority
of the official Finland gold
account is kept outside of Finland.
Let the conclusion be made that
governments are preparing for
a climax to the currency crisis.
Native Ilkka Hikipaa, CEO of
gold dealer KultaEeva Oy, is
on top of the story.

At issue is the gold market leverage and leasing by bullion banks, as well
as by central banks like in London and New York. No permission
has been granted to lease. The
owners want the gold repatriated. After
numerous similar demands, like
those of Venezuela, Germany, the Netherlands, Austria, Ecuador, Ghana, the last nations to do so could end up
empty handed. For verifiable
ownership, as with individuals,
gold must be in actual possession.
The people of Finland have
never been asked whether Finland should
keep and hold the gold on its own.
The issue is more relevant than
ever nowadays, since the global
financial crisis is without solution,
as the bank and bond and currency
systems are all hurtling toward
the abyss. See the GATA article
(CLICK HERE)
and the Finnish campaign's Internet
site (CLICK HERE).

## USTREASURY BOND EXPOSURE

◄$$$ USTREASURY BOND AND USDOLLAR BREAKDOWN IN PROGRESS. THE BOND MARKET
HAS CONVERTED INTO A FLASH TRADING
ARENA WITHIN THE BANK SYNDICATE
TO MAINTAIN BOND PRICES. THIS IS
AN EXPLOSIVE DEVELOPMENT, INDICATIVE
OF UNSUSTAINABLE SOVEREIGN BOND
PRICES KEPT UP BY ROUND ROBIN DRIVEN
BY INTERNAL SALES WITHIN THE FEDERAL
RESERVE BANKS THEMSELVES. SPECULATION
IS ABOUT TO RISE THAT THE USFED
AS A FINANCIAL FIRM IS SUDDENLY
SUBJECT TO CAPITAL RULES, WITH
INHERENT RISK OF FAILURE. IT HAS
STACKED UP OVER $3 TRILLION IN
IMPAIRED ASSETS, MUCH OF WHICH
ARE TRULY TOXIC. $$$

Last week, an extraordinary memo was received from a trusted colleague. It
could be important in yet unknown
ways. It read as follows. "I
spoke with an old banking friend
of mine on Saturday who now works
as an Executive Officer in the
Regulatory Division of the Dallas
Federal Reserve. The gist of the
conversation was this. There was
a panic teleconference among all
of the Regional Federal Reserve
banks on Thursday afternoon [Sept
5th]. The subject of this emergency
teleconference was USTreasury Yields.
The perilously low capital of the
Federal Reserve was at issue in
this meeting, and the fact that
they could no longer afford to
defend the USDollar at this point. All
of the regional Federal Reserve
Banks were ordered to unload as
many USTreasurys and Mortgage Backed
Securities as they could, even
though they are selling at a loss,
to provide immediate liquidity
even at the expense of capital!
Eventually, late Friday night a
tranche of Treasurys was sold above
market price to several Federal
Reserve Member banks in order to
drive down the yield! You can plainly
see this sale on the 10-year USTreasury
chart." Big news! Panic
setting in! Unsustainable bond
arena! Flash Trading has hit bonds!

Make several conclusions right away. Panic has finally hit the USFed. They
cannot defend either the USDollar
or its obverse USTBonds, the trading
vehicle. They are both at improper
high valuations. Rising interest
rates will next cause more sales,
the dreaded convexity to come into
play. The big US banks
must unwind their leveraged USTBond
carry trade, based upon the bond
futures contracts. Watch big
US banks sell their leveraged positions
that in the past three years provided
them supposedly easy profits. The
breakdown of the USDollar and USTBonds
has begun, a long process having
come full circle after the highly
destructive ZIRP & QE, both
engrained in monetary policy. The
breakdown in the currency and sovereign
bond will be aggravated by Interest
Rate Derivative dismemberment and
colossal losses. More important,
WE HAVE NOW SEEN THE BEGINNING
OF FLASH TRADING ON USTREASURY
BONDS !! A grand round robin closed
circle selling program will be
relied upon in desperation to maintain
price, just like with NYSE stocks
in Algorithm Trading. The internal
trading volume will grow and dominate
the system, just like with the
stock market where 80% of NYSE
volume is from the perverse Algo
Trading. No computer based trading
like with Algo Trading is regulated.
The dangerous times and instability
in bond market will become major
spectacles and news items. The
risk will be transferred to stocks,
which rise in value from more QE
volume flowing into asset purchases,
but which fall in value from creeping
bond yields. Great instability
will be a regular fixture in the
US Stock market, and possibly many
other national bourses around the
world.

The excellent insightful source EuroRaj pitched in. He wrote, "The
USTreasury & USDollar duo
is just the visual impact and
reaction seen of the gradual
geopolitical isolation of the United
States.
The world is reacting to the
misguided policy maintained by
the USFed to aid Wall Street,
while Main Street is permitted to go to the dogs. The isolation is now internal
and external. The bond trading
within the Fed system is nothing
but right hand selling to left
hand at a price which is meaningless
to the rest of the world. The
USFed is owned by the banks!" He
described Algorithm Trading done
by the Wall Street computer systems.

Normally the USFed has avoided the need for capital, in justification of its
own solvency. It has not been subject
to financial requirements, since
not an operating financial firm.
It is instead a financial fortress
and headquarters to coordinate
bank activity within a vast crime
syndicate. Back in 2009, the USFed
broke from tradition, by offering
a small interest yield for big US bank
excess reserves. Doing so raised
many questions. The Jackass
concluded soon afterwards that
the USFed was insolvent, and desired
the assets from big nearby banks
to disguise and obscure its insolvency. Capital
is of concern only when a liquidity
crunch is anticipated. Therefore,
the USFed appears very worried
about a liquidity threat, perhaps
from vast demands of USTreasury
Bond redemption, perhaps from a
breakdown of its own Primary Bond
Dealers. The game must have changed
recently and suddenly. One must
speculate that perhaps the USFed
balance sheet might eventually
be wound down, causing some devastation.
The USFed might suddenly be scrutinized
as a financial firm, where it is
suddenly subjected to capital rules
with risk of failure. Conclude
that the USFed received a phone
call from a higher power. As footnote,
bear in mind that the public has
long maintained an incorrect perception
that that the USFed can defend
itself from insolvency by padding
its balance sheets with assets.
This is not correct. This belief
of infinite creation of electronic
wealth to ward off deep insolvency
is a baseless myth. They can add
assets with equally offsetting
debts, net zero. The USFed is going
down the tubes into the sewer,
next door to Fannie Mae.

◄$$$ GLOBAL MARKET REJECTION WILL BE FELT IN USTBOND LONG MATURITY YIELDS.
NEXT TARGET 3.0%, THEN COMES THE
SURGE UPWARD. THE BIG US-BANKS
ARE EXTREMELY VULNERABLE TO MASSIVE
DERIVATIVE LOSSES FROM THE RISING
BOND YIELDS. THEIR LEVERAGED DEVICES
ARE FRACTURING FROM THE FAST RISE
IN YIELDS. THE BIG US-BANKS ARE
FORCED TO UNWIND THEIR GRAND CARRY
TRADE SPONSORED BY THE USFED SINCE
2011. WITNESS QE WHIPLASH, AS THE
EASY PROFITS URGED BY THE USFED
HAVE TURNED INTO CATASTROPHIC LOSSES
ON THE HIDDEN UNDER-CARRIAGE OF
THE BIG WESTERN BANKS. THE UNITED
STATES IS ON THE VERGE OF BECOMING
A VICTIM OF GLOBAL HOT MONEY FOR
THE FIRST TIME IN ITS HISTORY. THE
ULTIMATE DESTINATION IS THE THIRD
WORLD, THE DOORWAY BEING THE USTBOND
MARKET IN REVERSAL. $$$

The big US banks sit on a massive mountain of derivatives,
precisely when the TNX has gone
from 1.7% in May to almost 3.0%
in September. Derivatives break
down when much smaller moves occur
in the 10-year bond yield, like
last year with the London Whale
incident. The current TNX moves
are twice the whale's ripples.
The risk for leveraged damage is
hidden, and not visible on the
falsified balance sheet. JPMorgan,
Goldman Sachs, and Morgan Stanley
stand out along with Bank of America as being in line for annihilation. The
bigger banks stand to suffer at
least several $100 billion in derivatives
losses, maybe multiples higher. (Whenever
an analyst forecasts a $trillion
loss, he/she is labeled as a kook,
but the risk is real bare and gigantic.)

The behemoth JPMorgan Chase could lose a few $trillion in interest rate derivatives
alone, a small portion of their
roughly $70 trillion notional position.
The big Western banks, primarily
those in New
York, all stand to lose their entire
gains in the USTBond carry trade
over the last three years, perhaps
to lose double their gains. They
are the hidden sellers of USTGovt
securities, responsible for the
sudden deadly rise in the TNX. The
irony is thick. The big US banks
are in line for big losses in interest
rate derivatives, aggravated by
the grand unwind of the leveraged
carry trade in USTBonds by the
same big US banks!! These corrupt
bunkers directed cannon fire at
their own edifices, their own fortress,
from the easy bond trade sponsored
by the USFed. Recall Chairman Bernanke
boasting how these banks had been
quickly rebuilding their balance
sheets from USTBond investments.
Witness profound convexity at work,
from leveraged sales, in energized
rising bond yields. Analysts will
be taken by surprise when the derivative
losses stack up, and when the TNX
zips past 3.0% soon.

◄$$$ THE REAL THREAT TO THE USTREASURY BOND MARKET COULD COME FROM ITS
MARGIN OF TRADING, THE REPO MARKET.
IF THE DERIVATIVES ARE NOT THE
TRUE WEAPONS OF MASS DESTRUCTION,
THEN THE REPO ACTIVITY IS THE SITE
OF SUCH HARMFUL WEAPONS. IT IS
AN ARENA WITH A SMALL NECK, WHERE
AGAIN JPMORGAN IS ROOTED. $$$

The REPO market related to the USTBonds might be the trigger for the next financial
crisis. It is where the crucial
vulnerability lies in the financial
system. In fact, former FDIC chief
Sheila Blair, New York Fed Chief
William Dudley, and USFed Chairman
Ben Bernanke have all expressed
concerns about the REPO market. At
$4.6 trillion in size, it is where
almost every financial crisis since
the 1980s has begun. Little
has been done to reduce its risks
since the collapse in 2008, a point
raised by New York Times columnist
Gretchen Morgenson. It serves as
the refunding market for the repurchase
obligations (on maturing bonds)
and for wholesale operations. She
describes the REPO market as the
plumbing of the financial system,
where various securities are financed,
where money market funds are lent
to banks and other financial players. Constant
rollovers are executed for next
day handling. In practice, both
sides constantly agree to roll
over the deals rather than unwinding
them the next day. If one party
decides not to renew the transaction,
there could be trouble. That is
precisely what happened to Bear
Stearns and Lehman Brothers. Based
upon trust, the system is vulnerable
at this bottleneck.

Only two banks, Bank of New York Mellon and JPMorgan Chase dominate the business,
operating as intermediaries for
REPO deals, much like clearinghouses.
Some experts recommend creating
a central clearing platform where
all participants could trade directly,
similar to platforms the Dodd-Frank
Act mandated for derivatives. Such
a platform could be arranged as
a bank utility facility under full
monitor, with margin payments required
to finance bailouts in the event
of a participant default. New
regulations in the works would
require banks to hold capital against
assets they finance in the REPO
market. It will shrink in size
as a result, reducing liquidity
for the USTreasury debt itself.
Thus the systemic risk. These regulations
have already shrunk the REPO market
from $7.02 trillion in 1Q2008 to
$4.6 trillion today in the outstanding
volume. Higher borrowing costs
are assured from the declining
liquidity. Bruce Tuckman from the
Center for Financial Stability
warned, "Recent regulatory
changes will cause dealers to reduce
risk and to make markets less aggressively.
End users will lose some liquidity
as dealers adjust to higher risk
capital mandates, lower leverage
limits, and increased margin requirements." See
the Money News article (CLICK HERE).

◄$$$ THE TIC REPORT SHOWS AN INCREASE IN GLOBAL NET PURCHASES OF LONG-TERM
BONDS FROM THE THE UNITED STATES
IN JULY. THE BULK OF PURCHASES
WERE FOREIGN PRIVATE ENTITIES,
AS FOREIGN CENTRAL BANKS REMAIN
NET SELLERS. $$$

Reversing a recent trend, the US Treasury Internatl Capital (TIC) Report showed
a rise in foreign demand for US$-based
assets. The negative trend had
run for six straight months. The
USDept Treasury reported that net
foreign purchases of long-term
securities totaled $31.1 billion
in July, compared to net sales
of $67 billion in June. The aggregate
in July of all net foreign acquisitions
of long-term securities, short-term
securities, and banking flows was
a monthly net inflow of $56.7 billion. The
finer detail had a breakdown of
net foreign private inflows at
$59.3 billion, contrasted by net
foreign official inflows at negative
$2.6 billion. So central banks
are still sellers. Net purchases
by private foreign investors were
at $41.7 billion, contrasted by
net purchases by foreign official
institutions at $5.0 billion. At
the same time, US residents increased
their holdings of long-term foreign
securities with net purchases at
$15.6 billion. Apologies for occasionally
calling it the Treasury Investment
Capital Report.

◄$$$ THE USFED WILL NOT TAPER DOWN ITS HUGE BOND PURCHASES. AS THE STEADILY
CITED TAPER IS USED REPEATED IN
A LAST DITCH USTBOND DEFENSES (PROPAGANDA),
THE RISK RISES FOR LOST INTEGRITY. EXPECT
THE USFED TO ACTUALLY DOUBLE ITS
QE BOND MONETIZATION VOLUME OF
USTREASURY PURCHASES IN THE NEXT
SEVERAL MONTHS. THE BIG LIE
WILL BE EASILY EXPOSED, AND HELP
PUSH THE UNITED STATES INTO THE
THIRD WORLD. A GRAND GLOBAL REJECTION
AND EXPOSURE IS UNDERWAY. $$$

The new Jackass forecast: USFed bond purchase
volume will double in a new phase
of the QE to Infinity, an ongoing
saga, a true American Tragedy. This is Theodore Dreiser meets Robert Rubin and Hank Paulson. The Taper Talk
will be smashed as lies. The
USFed and USDept Treasury must
cover the enormous volume of
foreign bond dumpings. Many are
the contributing factors to the
destruction and burst of the
USTreasury Bond bubble, the biggest
grandest asset bubble in modern
history. The entire world is
involved, not just the Wall Street
power brokers (soon to fall on
their own financial swords).
A great many factors are at work:

big US banks reversal their colossal carry trade

fracture of Interest Rate Swap derivatives behind the curtains

ongoing near $trillion USGovt deficits

bloated USMilitary machine in perennial search of a war

global trade partners diversification in FOREX reserves

Indirect Exchange (return to sender) from foreign asset acquisitions

arbitrage that suppresses the Gold price against the paper currency regime.

The high stakes will change the world. The USFed, even the US President,
are making promises about reducing
the official QE bond purchase program.
It is like an endless nightmare. The US banking and political leaders are caught in
a trap. They pass on false rumors,
floated to help the USDollar. Foreign
players will depart from the USTBond
if they are certain the QE hyper
monetary inflation will continue
ad infinitum. What is happening
right here, right now, is the world
is recognizing the lies by the
USFed and USGovt regarding the
USTBonds. The world is coming to
realize it is a grand asset bubble
on the verge of bursting. The United States is to become the Western industrialized
world's first hot money victim.
Just as Switzerland was the 2011 beneficiary of hot money
inflows, the United
States will
be the 2013 victim of hot money
outflows. The hot money exodus
will gather momentum, cause financial
earthquakes, cause a recognized
economic depression, make clear
the eventual USGovt debt default,
shatter the derivative market,
and usher the United States into the Third
World. Back in 2008 when the Jackass
forecasted a USGovt debt default
and a fall into the Third
World, the details were very unclear,
but the ultimate outcome was crystal
clear. THE EARLY STAGES HAVE BEGUN
TOWARD THE HOT MONEY DEPARTURES
FROM THE USDOLLAR !!! The United
States has
never been the victim of hot money
exodus in its entire history. Neither
has it been on the edge of falling
into the Third
World. Witness the bitter fruit
of the Fascist Business Model in
its full corrupt destructive glory.

The Voice commented on the above opinion constructs. He brought in some geopolitical
consequences. He said, "Spot
on regarding the hot money abandoning
the USTreasury Bond. It is the
biggest asset bubble in history,
supported by bank derivatives and
fictional safe haven dynamics.
The United States never thought to see the day where
the rug is pulled from under their
feet in a situation like what they
created in Syria.
The next blow will be how the US will
be forced to deal with Iran." Due
to his direct bold style, often
delivered in private emails among
a few trusted colleagues, edits
are used, but the themes are very
much his own. The big losers are
the Middle East partners for the United States. One nation lost their US threat
potential component, whose political
power leverage center has been
the Council on Foreign Relations.
Another nation lost their Persian
Gulf protector. In fact, the gulf
will see the new protectors emerge
more openly in Russia and China,
who no longer tolerate the typical
American power ploys. The Chinese
have made significant investments
across the entire Persian
Gulf within the local economies.
Pressures are at work where the
tiny US ally on the Southeast
Mediterranean is moving toward
more cooperative relations with
its Arab neighbors. As the United
States and United
Kingdom endure
their fateful plunge, the tiny
ally must make pragmatic decisions
to survive. Such a shift has been
in the making for well over 25
years, but now gains momentum.

The world is making a Paradigm Shift in trade and finance. The Voice brought
the geopolitical chess game back
to the Gold and Currency front.
He concluded, "We will
see commodity based money being
introduced with precious metal
at its core. However, the Anglo-Americans
will stage one more battle, trying
to revive their previous dominance.
The proximal victim could be the
USGovt debt market, the nation's
most vulnerable point. If they
do not step into line and conform
to the global plans [led by the
Eastern giants], they will be annihilated
politically, economically, and
socially. If it comes to that,
be sure the potential exists for
wider war, as in nuclear war. We
shall soon find out." THE
TIME FOR GAMES IS OVER!!

◄$$$ THE DAMAGE TO RISK SPREADS AND TO THE MORTGAGE MARKET IS REAL. THE
RISING USTBOND YIELDS HAVE FINANCIAL
AND ECONOMIC CONSEQUENCES. $$$

The risk for disorderly rotation has never been greater. The accelerated outflows
from bond funds will eventually
lead to wider high grade credit
spreads, causing great disruptions.
Many pension funds depend upon
credit spreads for income. The
generated income will vanish more
than it already has in the last
two years. Witness the fastest
rise in mortgage rates in five
years. The depressed housing market
is being kicked in the face and
groin simultaneously. The bubbly
US Stock Market is at risk of sudden
decline, from rising rates. The
risks are everywhere, both financial
and economic. Before long the USGovt
will announce its forced migration
for pension funds into the USTreasury
Bond complex. See the Zero Hedge
article (CLICK HERE).

◄$$$ EVEN THE WAR DRUMS DO NOT BRING IN USTBOND INVESTORS. UNLIKE IN
PAST CYCLES, THIS TIME THE USDOLLAR
AND USTBOND VEHICLE WILL SUFFER
FROM THE DRUMS OF WAR. THE UNITED
STATES IS NOT SEEN AS THE SAFE
HAVEN ANYMORE, BUT RATHER AS THE
CAUSE OF FINANCIAL RUIN AND THE
CAUSE OF WAR. THE LEADERS OF US-BANK
POLICY ARE SEEN AS THE CAUSE FOR
GLOBAL ECONOMIC HARDSHIP (LIKE
RISING FOOD PRICES). THE NEW REALITY
BRINGS FORWARD THE POTENTIAL FOR
RETALIATION IN THE FORM OF FINANCIAL
WARFARE SCENARIO DIRECTED AGAINST
USTBONDS. FULL SPECTRUM DOMINANCE
HAS GIVEN WAY TO GLOBAL RETALIATION.
$$$

Never before has it been so clear that the USDollar is supported by military
might and bond fraud, and not industry
or hard work. The Full Spectrum
Dominance promoted by former VP
Cheney has turned the world into
a predator paradise. The backlash
has begun against the United
States, whose
prestige has never been lower in
a century. As reported last month,
the TIC Report indicates foreign
sales of US$-based bonds, primarily
USTBonds, in volumes that are setting
historical records. The United States is no longer seen as the rescue
party, but rather than pirate landing
party and the cause of most financial
and economic problems. The
export of mortgage bonds in the
last decade sent the signal. The
die was cast on sentiment against
the once great nation, the former
cradle of capitalism and beacon
of freedom. The US has become a financial
predator, regardless of the identity
of the perpetrators on Wall Street.
They are in Jackass view descendants
of the Nazis and from the core
of the Banker Syndicate whose identity
is linked to the last letter Z
of the alphabet (with a US National
Park bearing the same name). Their
activity is never a topic for report
discussion.

The USFed monetary policy has aided the big Western banks, but at the expense
of most every nation of the world,
lifting food and energy prices. The
capital destruction tied to the
USFed actions knows no borders.
Worse, for the first time in human
history, a major military predator
has ravaged the world, with the
war costs paid for by the same
targeted nations of the world,
including the victims themselves. The
world has begun to call a halt
to funding the USMilitary that
operates on the USDollar credit
card. The world has begun to shut
down the financial espionage offices
scattered across numerous countries,
disguised as fostering commercial
and economic development. The recent
USTreasury auctions have been wimpy
and lackluster. Foreign sales have
grown to historical levels. The
threat of a buyout boycott for
USTreasury Bonds is a real and
present danger. See the Zero Hedge
articles (CLICK HERE and HERE).

The vengeance has already begun. The movement is gathering great momentum,
enough to cause trepidation and
obstruction attempts by the West,
led by the United
States and United Kingdom. Usage of bank SWIFT codes in
standard financial warfare has
met with resistance. Usage of bank
bans in certain nations has met
with resistance. The Eastern response
has been to work toward an alternative
to USDollar usage in trade settlement
in more distributed systems. The
bank SWIFT and currency FOREX systems
will be circumvented. The game
is on! The opposition forces are
rallied around the G-20 Nations,
the BRICS nations, and the Shanghai
Coop nations. They are led by China & Russia. The groups are a formidable adversary,
which are gradually acquiring more
financial savvy necessary to reach
the finish line, defined by Gold
Trade Settlement using gold intermediaries.
Notice how Russia is
the white face confronting the
West in the foreground, while China is the Asian face opposing
the West in the background.

◄$$$ RUSSIA AND CHINA OWN OVER $1.4 TRILLION IN USTREASURY BONDS.
THEY ARE AT RISK DURING A RETALIATION
USED AS A FINANCIAL COUNTER ATTACK.
FOREIGN OWNERSHIP OF USGOVT DEBT
LEAVES THE NATION INCREDIBLY VULNERABLE.
THINK HOT MONEY RISK, LIKE WITH
SMALL WEAK NATIONS. A SPECTACULAR
ROLE REVERSAL IS IN PROGRESS. $$$

When the Jackass was a young adult, the queries were answered. The United
States was
not so vulnerable from its debt
since the investors were largely
US-based financial firms and
pension funds and individual
savers. That changed around
year 2006, when foreign entities
raised their stakes to over 50%
of available USTreasury debt
securities. The US has
been vulnerable for years to
outside driven priorities. In
2008, many stories swirled that China forced
the nationalization of Fannie
Mae. Their mass sales were on
the verge of causing a national
housing market disaster, and
worse, revealing the multi-$trillion
fraud within the House of Fannnie & Freddy.
The Clinton and Papa Bush theft
of $1.6 trillion from the Fannie
Mae coffer was effectively managed
via threats and a certain Oklahoma
City building being destroyed
in 1995. Another vapid lone gunman
story covered it up. More stories
were heard in 2011 with Hillary
bestowing eminent domain to China.
Here today, the USGovt and USEconomy
can easily be held hostage to
the USTBond attacks. The defense
has been the Quantitative Easing,
a euphemism for hyper monetary
inflation in the form of USTBond
purchase with printing press
money. Such defense has wrought
destructive effects the world
over for more than three years.
It is called stimulus, when it
is actually a defense against
economic and financial death
throes at home, accompanied by
disdain and contempt abroad.

Between the two of them, China and Rusia own $1.414
trillion in USTreasury Bonds,
equal to 25% of all foreign held
USTreasury debt securities. They
hold a weapon.China owns almost ten times
more than Russia,
with $1.276 trillion versus $138
billion. In the event of any
military escalation, these two
nations and the other BRICS nations,
along with many nations among
the G-20 Group might begin a
fierce selling campaign. They
could force a rapid decline in
the USTBonds, unconcerned about
price. The motive would be to
weaken the USMilitary and call
it home for financial reasons. The
most vulnerable part of the US underbelly
is clearly the USGovt debt. It
might soon become the target
of the increasingly powerful
voting bloc. The emergency
plan would be to ramp up the
USFed bond monetization program,
exactly when the once respected
central bank offices promises
of reduced bond purchases (the
Taper). However, the ugly secret
is that the USFed is already
buyer for between 80% and 90%
of the entire volume of USTBond
securities under auction for
new issuance and refunded sale
(rollover debt). Witness a transition
where the United States is subject to incredible risk from
foreign money departing from
support. This is precisely
the emerging market risk from
hot money seen in previous crises,
a spectacular role reversal in
progress. The US is vulnerable to lost foreign faith and high
volumes of departing funds, in
a grand turn of the tables.

## USDOLLAR DEATH THROES

◄$$$ USDOLLAR AND GOLD FUTURE POTENTIAL PATH IS DIFFICULT TO ENVISION,
BUT IT IS SLOWLY COMING INTO VIEW.
THE WORLD IS PURSUING A NON-USDOLLAR
PATH FOR TRADE, WHICH WILL LEAD
TO CHANGE IN GLOBAL BANKING PRACTICES.
EVENTUALLY THE COMEX WILL NOT OFFER
A GOLD PRICE, SINCE IT WILL BE
ABANDONED DUE TO EMPTY VAULTS AND
A SPEW OF LAWSUITS. AFTER A DARK
PERIOD, THE GOLD PRICE COULD BE
REPORTED MUCH LIKE LIBOR, AS AN
AVERAGE OF POSTED PRICES AT MAJOR
TRADING CENTERS.

THE KEY FACTOR WILL BE GOLD TRADE SETTLEMENT AND THE RETURN OF THE GOLD STANDARD.
HIGHLY DISRUPTIVE STAGES WILL ARRIVE.
AT LONG LAST, BANKING WILL FOLLOW
TRADE AND FORCE THE USTBOND OUT
OF THE BANKING SYSTEM RESERVES
FOUNDATION. CRIMINAL ARENAS WILL
BE SWEPT ASIDE. SURVIVAL OF NATIONS
WILL MOTIVATE GLOBAL TRADE PLAYERS
TO JOIN THE ALTERNATIVE MOVEMENT
AWAY FROM THE USDOLLAR AND TOWARD
THE GOLD STANDARD. $$$

In the last decade, the fraud behind the US$-based
bonds has been reported on a widespread
basis. When near full exposure,
the USAgency Mortgage Bonds were
put under the USGovt wing for protection
and concealment. The next stage
has seen endorsed heresy in hyper
monetary inflation as the norm,
the accepted policy, the extraordinary
measures fixed in place without
option of removal. A return to
normal via an exit strategy has
been rendered impossible. In the
meantime, as quantum steps are
attempted by foreign nations in
opposition to financial warfare,
the war card has been trotted out
while the terrorist hand has been
played too far. The world is starting
to see how the USDollar is backed
by debt, bond fraud, and USMilitary.
The debt pathway has run out of
road. The last ditch is the advocated
war drumbeat, and the declaration
of enemies to the USDollar as terrorists.
The sleepy dullard masses for the
most part buy into the propaganda.
The credibility of the USGovt leadership
and message has never been as low
as today. What follows is a speculation,
a vision of the future path, replete
with tremendous change, probably
mass violence, and unspeakable
hardship.

Opposition builds against USD/USTBond. A confusing future path comes for
USDollar and Gold in its evolution,
as an exit from the intractable
global financial crisis is more
actively pursued in urgency. Since
liquidation of the big Western
banks will be permitted to occur,
and certainly not be ordered willingly,
the crisis will reach a crescendo.
The alternative pathway will be
pursued, but it requires powerful
protection from the Russian and
Chinese military forces. An usual
combination of economic forces
and financial forces is converging
against the USDollar and its USTreasury
Bond vehicle. The foreign economies
of the Eastern
Hemisphere are pursuing trade (economies)
but strive to settle in Gold (finances).
At the same time, entire trade
zones are organizing, built around
a defiant infrastructure not of
highways but of energy pipelines. The
presence of Iran is like a cathartic
agent not for its pursuit of rights
and respect of culture. Instead, Iran steadfastly refuses
to follow the USDollar direction
(right of way) declared on the
financial trade routes. If
the Western financial platforms
do not collapse from insolvency,
they will soon falter from isolation
and avoidance. The crisis will
probably be pocked by a cross of
inadequate capital within the system,
and toxic currencies spreading
a cancer as the system cannot escape
the USDollar, nor other major fiat
currencies in tow on the floating
dirigible known as FOREX.

Broken financial markets. As the crisis approaches climax,
the financial markets will spin
out of control but growing recognition
laced by deep confusion. Expect
the USDollar to rise and rise and
rise, then split in two, then be
devalued without mercy. In time,
if left to seek equilibrium, the
USDollar will be killed from devaluation
and global rejection. The split
will be forced as the USGovt attempts
to control its movement and exchange
rate. Foreign entities wish to
be freed from USGovt/USFed control
over the USDollar. It cannot be
separated from the USTBond, which
has begun the deadly phase of rejection.
Foreign nations will respond to
their currency decline by departing
from USDollar usage, in small ways
at first, then in important ways
later. The USD will gain ground
from rising interest rates, paradoxically
through rejection. The USD will
suffer decline from the broadbased
sale of USTBonds, from a reality
fast lane, the new deadly HotMoney
departure. The USEconomy is
on the verge of importing three
decades worth of exported inflation.
The result will be unstable sovereign
bonds, unstable FOREX currency
exchange rates, and unstable economies. The
managing offices in foreign lands
will seek a desperate quarantinne
from the USDollar, embracing the
stable ballast of Gold, even in
the face of USMilitary threats
and accusations of terrorist campaigns.

The Asian Gold foundation. The Gold arena will enjoy an ascendance
within commerce with powerful motivation
to seek a survival route to an
island which will grow into a Global
Golden Pangea. The process will
be greatly enhanced by means of
the general trade by China and
the energy trade by Iran.
The infrastructure of energy pipelines
will provide a skeletal foundation
much like a human circulatory system
that transports oxygenated blood.
The energy commerce will provide
the new system a strong basis in
stability, the commercial skeletal
support. Secretly and in tremendous
volume, both Russia & China will continue to accumulate Gold bullion
reserves. My source indicates that China has
over 15,000 tons and Russia over
20,000 tons. He has served
as broker for the former and has
witnessed the latter. Pay close
attention to the triangle of Turkey, India, Iran for development of the
gold trade settlement model. It
has already hatched, enjoying a
certain degree of evolution. Turkey has played a unique role for over one
thousand years in intermediary
gold trade provision. Turkey is the primary gold provider for the entire
Arab and Moslem world, the core Middle
East provider, except for direct
shipments from Swiss refineries.

The real Iran transgression (crime). The crime committed by Iran has
almost nothing to do with nuclear
arsenals or military threats to
key nations. Without question, Iran's
offense has been to conduct its
energy trade (crude oil & natural
gas) outside the USDollar sphere. The
irony is that development of non-USD
trade acts like a financial weapon
of mass destruction that assures
economic failure and financial
crippling in the West, as long
as the major nations continue to
build their entire commercial and
financial platforms around the
USDollar and USTBonds respectively.
Given the absent basis for the
USDollar and the toxic nature of
the USTBond, the resulting force
has been to destroy and to kill
capital. The outcome has been deeply
insolvent financial structures
(banks) and dysfunctional economies
(businesses). The USD/USTB embrace
results in economic death. The
systems devoted to the US bank leadership are shedding jobs, while the
the cost of living (mainly food
prices) is rising to critical levels.

The coming Dark Period. The avenues leading away from the
concentrated chokehold from the
USDollar are fraught with danger
from indirect attack of financial
and covert violent nature. The
Eastern nations, which form the
critical mass of non-USD trade
development, are working fiercely
to avoid the SWIFT bank code weapons
and the FOREX currency trading
arenas. Since under US & UK control, they will be averted if Gold is ever
to achieve ascendancy from the
return of the Gold Standard. As
the system is derailed, as the
platforms collapse, as the economies
cannot provide income to sustain
the population, a dark period is
coming that will not provide for
a clear Gold price. The declining
COMEX and JPMorguen gold inventory
foretell of big consequences, of
grand disruptions. The refusal
to honor Gold futures contracts,
the obstruction of contract delivery
as has been the case since June,
the whacky financial market prices
for assets, and the overplay of
the military card will result in
broad systemic failure and profound US isolation.
The disorder and chaos will demand
an alternative system be put in
place, or at least attempted in
trials. The interrupted supply
chain will demand new bold solutions
of different types, as all past
solutions will be discarded and
denigrated. A dark period will
be entered.

A reported Gold much like LIBOR. The COMEX eventually will have no
gold futures contract, since its
absent inventory will become common
knowledge. Given obstructed metal
delivery, the contract will simply
go away. It will soon have no credibility,
and certainly no perceived integrity.
In will convert into a Cash & Carry
gold mart. As a result, it will
follow the Gold price, not determine
it. Its price discovery role will
go away as well, like an exhaust
factor from lost inventory. The
artificially low kept gold price
has resulted in a natural consequence,
as in vanished cleared non-existent
inventory. Gold trade will continue,
as it always does, but not in the
usual way. Negotiation will be
more flexible to arrive at a price
where supplier is willing and buyer
is satisfied. Expect 5 or 6
or 7 gold trading global centers
to post different Gold prices.
During this dark period, the reported
Gold price will be the average
from these brisk centers. The
averaged Gold price will resemble
and be modeled after the LIBOR
price set by average methods. Perhaps
the lowest and highest prices will
be trimmed before a final average
is calculated. The pressure from
the emerging Gold Trade Standard
will force the Gold price to multiples
higher, like over $5000 per ounce
easily, probably closer to $7000
per ounce as national gold reserves
ramp up in competition.

The rush to acquire Gold reserves. Governments will be forced to scramble
to acquire gold for the new currency
system. The present currency system
is gradually being discredited,
due to their unstable and faulty
sovereign bond foundation. Economies
will be forced to scramble to acquire
gold in big banks in order to enable
and facilitate trade. The big
mining firms are highly likely
to be confiscated for gold supply,
an assured supply chain. The smaller
mining firms are highly vulnerable
to be acquired by force, bought
with pennies per share. The Jackass
belief is that no confiscation
of personal investment gold will
be attempted. Many are the pressures
for the USD to rise hand in hand
with rising bond yields, broad
debt settlement, and hidden derivative
settlement. Much European debt
is written in USD terms. All bank
derivative contracts are written
in USD terms. In contrast, many
pressures for USD decline will
come from lost faith by foreign
entities, as the USTBonds are rejected,
dumped, and exchanged for real
money. A grand conversion process
is in the works, to convert USTBonds
into Gold bullion. The BRICS Bank
will lead in the conversion of
toxic paper to Gold bullion. The
process will be slow at first,
then grow into a torrent, finally
a tragic flood. The USGovt will
resist the transition, tooth and
nail, even to foment war. The United
States will
attempt to convince nations to
sink with them under the weight
of the USDollar.

Grand changes to bank reserves
management. As the world
rejects the USDollar and discards
the USTBond vehicle, the banking
systems will convert from a foundation
of fiat paper sovereign debt
and work toward a solid ballast
in Gold bullion. For five decades,
the banking system has dutifully
followed the Petro-Dollar defacto
standard. The banking reserves
foundation have been USD-based
for these many decades as a result.
That is about to change, and
cause severe disruptions. The
foundation will revert to Gold,
the stable basis with no debt
counter-party. The USGovt will
resist the transition, tooth
and nail, even to foment war.
The United
States will
attempt to convince nations to
sink with them under the weight
of the USDollar. Instead, they
will rebel and force a split.
The split USDollar will result
in tremendous pressure for USD
devaluation in order to finance
debt. The USGovt must attract
some foreign money to cover the
deficits and securitized debt
supply. The attraction will not
be very successful. The dependence
upon the Weimar
printing press will continue
unfortunately. The USD will be
inflated into nothingness, just
like the ReichMark of the 1930
decade. Such irony is fitting,
since the current USGovt management
team owes their descendence and
style to the same National Socialists
(nazis).

The coming rise of Gold into ascendance. Any gold confiscation plan would lift the Gold price quickly, as value would
be perceived in an item pursued
so vigorously. The gun confiscation
plan might be a trial run so as
to monitor the acquiescence of
the US public.
They might yield rights in the
face of violent events of uncertain
origin. But the US public
is not likely to give up their
gold or their guns in the face
of rising disorder, increased supply
shortages, including threats to
their homes and families. After
the dark period is exited, the
Gold price will reach $3000 per
oz easily. The Gold price will
reach $5000 in the following several
months as the Gold Trade Standard
returns, installed in the East. Nations
will replenish their banking systems
with the recognized Gold bullion,
acknowledged with unquestioned
value and no counter-party debt
obligations. The West will be required
to gather Gold bullion, even to
bid its price higher, if the Western
nations wish to be supplied by
Eastern factory output. The deck
must be cleared from the derivative
cancer nodes, whose chaotic consequences
will motivate more Gold purchases. The
Gold price will reach $7000 in
the following year or so, as USTBonds
are converted to Gold in the grandest
tragic display in modern history
of false wealth to bonafide wealth. The
Paradigm Shift dictates vaporous
paper wealth to chase true Gold & Silver
wealth.

The ignominious fall into the Third World. In the process, the United States will be transformed into a de-industrialized Third
World natio under police state
rule, Gestapo tactics, and openly
recognized Nazi leadership, unless
a USMilitary move is made to restore
the republic. The hour is late.
Wall Street bankers know full well
the consequence of global rejection
of the USDollar as the reserve
currency. The USGovt will resist
the transition, tooth and nail,
even to foment war. The United States will attempt to convince nations
to sink with them under the weight
of the USDollar. The Jackass does
not advocate any USMilitary move
against the White House. My preference
is for reform that restores the
Republic and renews the Constitution.
But a drastic maneuver seems the
most possible route since liquidating
the big banks is not a permitted
or considered option. It is difficult
to conceive of an American nation
which succumbs to narco power and
extended bribery to capture and
control the hearts and minds of
the thousands of people in leadership
positions. A great tragedy is unfolding,
during the systemic failure. It
will be ugly, violent, and full
of loss in most conceivable ways.

◄$$$ CHAOS WILL ARRIVE WHEN THE USDOLLAR IS REJECTED, THE RESULT IMMEDIATE
TO SUPPLY CHAIN. THE MOST DIRE
EFFECT WILL BE TO CITIES. THE DISRUPTION
WILL BE WORSE THAN WAR. NO DESTRUCTIVE
WAR HAS HIT THE NORTHERN UNITED
STATES IN ITS HISTORY, SINCE THE
REVOLUTIONARY WAR WITH ENGLAND.
THE CIVIL WAR WAS FOUGHT IN THE
SOUTHERN STATES. THE TWO WORLD
WARS WERE FOUGHT IN EUROPE, NORTH
AFRICA, RUSSIA, AND THE PACIFIC. THE GLOBAL REJECTION
OF THE USDOLLAR WILL CAUSE GREAT
DAMAGE TO THE AMERICAN HOMELAND
LIKE AN ECONOMIC BATTERING RAM
AND A CAPITALIST HAMMER. THE SUPPLY
CHAIN WILL BE TURNED UPSIDE DOWN
AND BROKEN. VIOLENCE WILL ENSUE
FROM THE SHORTAGES AND FRUSTRATION,
CENTERED AT FOOD MARKETS, FUEL
STATIONS, AND CASH MACHINES. $$$

Devastation to hit the US homeland. The orderly development of the USDollar
alternative to trade described
in the previous story will have
a domestic effect to the USEconomy.
It will be extremely disruptive,
interrupting the supply chain,
and causing violence among the
increasingly restless natives.
The US homeland
has never suffered damage from
war since the 18th century, when
independence was won from England (with
critical reinforcement from France). None of the Spanish-American War, the
Civil War, World War I, World War
II, none touched the northern states,
the core. The Global Money War
as the Jackass has called it, will
cause damage, destruction, and
maybe devastation to the core United States. The entire
supply chain will be interrupted
from the global rejection of the
USDollar. The USEconomy does not
pay its bills, but rather forces
a credit card upon the rest of
the world in the form of USTreasury
Bond purchase and ownership. That
model is changing, and the USGovt
is resisting the transition tooth
and nail, even to foment war. The United States will attempt to convince nations
to sink with them under the weight
of the USDollar. The Global Fascist
Enclaves wish to destroy the United States, since it has served as the cradle
of capitalism and the beacon of
freedom. The enclave leaders are
the likes of Henry Kissinger, Zbigniew
Brezinski, David Rockefeller, and
Papa Bush.

Big US bank and COMEX immunity from law. The
supply chain first came into extreme
focus at the COMEX. The COMEX has
been in default numerous times
already. The MF-Global thefts in
December 2011 were the first egregious
criminal act, complete with contract
breach. Instead of declaring a
default in the Silver market, MFG
decided to call upon JPMorguen
to steal all the accounts awaiting
silver contract delivery. The silver
bars all ended up in the JPM account.
Later the accounts were settled,
most of the funds returned, but
without silver delivery. The
MF-Global incident was a default
event, given cover by Wall Street,
the USGovt regulators, and the US Appellate
Court. In April, June, and
July of 2013, JPMorguen delayed
and delayed on gold delivery, refused
to honor contracts, and through
coercion forced the contract holders
to roll over into future months.
But JPM took the gold delivery
themselves, replenishing their
JPM account again. The market has
been a default event in continuation.
The big basic question is: WHEN
WILL THE LAW BE ENFORCED?? The
answer is simple: NEVER. Not until
the COMEX is shut down, not until
JPMorguen Chase Bank is liquidated,
and probably not until the USGovt
debt default occurs.

Crime Syndicate in control. Criminal activity is the norm. Bank
fraud, contract fraud, and basic
thefts are protected under the
bold cover of USGovt official policy
and law enforcement by the crime
syndicate itself. The USDept Treasury,
USDept Justice, and the USFed work
together to maintain the criminal
fortress as primary priority. If
pressured, the reason has been
and will continue to be stated
for national security. Nixon began
the usage of national security
in criminal defense. Nixon in my
opinion was the first fascist US President, part of a deal struck that included
the Kennedy assassination, then
abrogating the Gold Standard. The
underlying explanations tend to
be grand crime syndicate activity.
Since the Clinton Admin, the USGovt
has been a vast criminal organization
operating in the open. His Treasury
Secretary Robert Rubin led the
initiative to drain Fort Knox of its
gold in a vast scheme called the
Gold Carry Trade. They pushed
the gold lease rate to zero, and
enabled the Wall Street banks and
USGovt executive accounts to benefit
from the virtual theft of the national
gold treasure held in Fort Knox. The Clinton-Rubin gang left the US nation
vulnerable to systemic failure
from no currency collateral foundation.
Since 911, the bank syndicate went
into the open in bold manner with
raised flag and shredded Constitution.
Even Bush Jr declared the once
revered document a mere piece of
paper. These are fascists, otherwise
called nazis. Remember Papa Bush's
father Prescott Bush led a failed
attempt to oust FDRoosevelt. Prescott should have been executed. Instead he
was given a remote assignment in
the Central Intelligence Agency,
where he arranged for his son to
lead special projects, and later
head the CIA itself. The law will
return when the USGovt debt default
occurs. The pathway has been built,
lit, and directed in an inevitable
procession. The upcoming systemic
failure will be broad, wide, deep.

Widespread supply chain disruptions. The disruption from shortage and
disorder will render tremendous
damage to the entire supply chain,
even the infrastructure to the
USEconomy. To some degree, the USA will
feature charred ruins with violence
almost everywhere. The Jackass
is beginning to make a public forecast
of the US experiencing thousands of deaths in the cities
from cutoff of supply. It could
be worse, with millions perishing.
Imagine a crowded movie theater
amidst a fire, but on a metropolitan
scale. The roads will be clogged.
The supermarket shelves will be
empty, as trucks will not enter.
The gasoline stations might have
spotty supply. The big banks will
be a wreck, leading to empty ATMachines
for cash dispensed. People will
act in desperate ways to survive.
The chaos will be horrendous. It
is inevitable.

Redrawn geopolitical map. An increasing risk of some false
flag attack on US soil is likely to garner support for a new
war over Syria.
In fact, an increasing risk of
some false flag attack on US soil is likely to distract from the global
USDollar rejection. Worse, an increasing
risk of some false flag attack
on US soil
is likely to offer a grand smokescreen
for the bankers to escape. The
geopolitical chess board is on
the verge of being drawn again,
not for Saudi Arabia and Iraq and
Northern African states, but for
commercial boundaries and passageways
in Western Europe. For five years, the bankers in London, New York, and European
Commission have fiddled and diddled
with their phony baseless solutions
that have applied flimsy bandages
with no effective cure, no effective
surgery, no effective removal of
dead tissue, only more toxic ointment.
Therefore, Western
Europe will turn East for commercial
solutions after failed bank solutions.
The USGovt will resist the transition,
tooth and nail, even to foment
war. The United States will
attempt to convince nations to
sink with them under the weight
of the USDollar.

Rise of Gazprom, the principal chessboard piece. The newest geopolitical chess piece is Gazprom and its vast network of energy
pipelines, even LNG port facilities.
The disorder and disruption that
comes to the US shores will be accompanied by Western European
nations forging new deals with Russia & China.
In the process, a new protectorate
role will be made clear for both
Western Europe and the Persian
Gulf. NATO and the USNaval Fleet
are to fade away from their prominent
role. The hammer and sickle has
been replaced by Gazprom and the
energy pipelines, with reinforcements
in the form of an array of industrial
and strategic metals in supply.
The big Paradigm Shift will feature
the nations of Western Europe seeking
protection not from NATO, but instead
from Russia.
They will be influenced by Gazprom
energy supply chains and Chinese
retail supply chains. The chess
board will be redrawn. An increasing
risk also will be seen for some
retaliatory foreign attacks against
US cities for its flagrant USMilitary
attacks on civilian centers via
drone strikes. The biggest threat
might be from supply interruption
that reeks violence at primary
supply centers.

Isolation accompanied by British signals. A major significant quantum jump in violence is soon to hit the United
States.
The United
States nation
will be indescribably isolated,
as it loses its biggest and most
loyal trade partners that share
genetic heritage, the nations
of Western
Europe. Watch England for the tipping point
signals. One such signal has
already been given, denied military
support for the USMilitary strike
in Syria. England also
signaled a new Chinese financial
alliance by accepting the Yuan
Swap Facility, and paving the
way for Chinese Govt debt trading
in London City. The examples of Libya and Egypt are very clear for
aggression and puppet regime. Russia & China will
not permit an expansion of such
criminal chaos.

◄$$$ THE GLOBAL POLICE AND SENTRY FORCE HAS TURNED PREDATOR IN RECENT
YEARS. HOWEVER, THE SECURITY ROLE
HAS BEEN EVIDENT, DESPITE THE PREDATOR
ROLE AS WELL. SOON CHAOS WILL BREAK
OUT, WHEN THE USMILITARY STANDS
DOWN OR IS BROUGHT TO HEEL. $$$

The Voice offered a different kind of perspective, concerning the removal of
a longstanding global stabilizing
force. The United
States is
going to falter further, with some
important global consequences.
He wrote, "Event driven
scenarios will accelerate as the
system nears total collapse. It
is almost impossible to keep up
even with some of the major issues. With
all the terribly stupid things
the US is doing, it also does
good things, namely preserving
our way of life. Once the US collapses, we shall see
terrible things happen all over
the world. In the good old days,
during the British
Empire, it was enough to fly a
Union Jack [flag] on the camel
caravan in the desert and no one
would touch you. Today they piss
on the British and American flags
and nothing happens. In the Middle
East we now have a situation where
whatever you do, it is wrong. In
Latin America and Asia it is not much different. We are heading for a tremendous system
reset event in a financial sense,
with grand changes to the world
tectonics. The economic and financial
stability will be lost. This Fukushima situation is a gigantic problem, affecting the food chain
and air quality for the entire Pacific
Ocean region and North American
continent."

The exodus of money from emerging markets accelerated in the last week of August. Collectively,
bond & equity funds endured
net outflows of almost $6 billion,
nearly double the previous weekly
outflow. To put perspective on
volume, the emerging bond & stock
funds took in a cumulative $90
billion in all of 2012. Data
is monitored by Boston-based
fund tracker EPFR Global. Investment
bonds denominated in emerging
market currencies were particularly
hard hit, as currencies for Turkey, Indonesia, and India have recently fallen sharply against the
USDollar. Emerging markets have
witnessed heavy losses since
May as investor conviction made
a shift, in response to the USFed
talk of reduced bond purchase
volumes, pulling back from the
Quantitative Easing. One must
wonder how much investment capital
from cheap US$-based borrowed
funds found its way to the energized
emerging markets. See the UK
Telegraph article (CLICK HERE),
which covers more details on
the macro picture of the Indian
Economy.

The threat of an end to the credit glut spew from the United
States is
reeking havoc in the developing
countries like India, Thailand,
and Indonesia, whose currencies
are plummeting. Fears are fresh
that a redux of the 1997 market
crash is on the horizon. Not
only is hot money departing these
nations, but gold is entering.
As the gold enters, the local
currency falls further in a vicious
cycle. Official defensive measures
have accomplished little, except
to annoy the masses. Since May,
the Indian Rupee has lost 17%
of its value against the USDollar.
The two commonly regarded reasons
for the decline pertain to dwindling
faith in the Indian Economy and
Indian leaders, as well as the
anticipated tapering down of
the USFed monetary easing. Much
of the easy money from the USFed
released onto the market as a
way of stimulating the economy
eventually made its way to India or other emerging markets, where it drove
up property values and stock
prices in broad strokes.

Rising USTBond yields mean that the money is called home, the carry trade gone
into reverse, the debt paid off
with some loss taken on the US borrowed
side. To be sure, investors from
foreign locations are increasingly
pulling their money out of emerging
markets. Currency value is now
dropping in many countries that
previously profited from foreign
capital, like Brazil, Russia,
and South
Africa. Hardly
anywhere is the phenomenon as extreme
as in India. Curiously, the leading BRICS country China is
not directly affected by the current
currency crisis, since the Yuan
is not freely convertible currency.
It cannot be immediately converted
into major reserve currencies. But
the Chinese Govt rulers have their
own challenges with a banking crisis
and an urgently needed realignment
of industrial sector toward more
domestic consumption. An integration
effect is also damaging. As the
Chinese Economy falters, its import
of raw materials from other newly
industrialized countries has declined
in kind. It Southeast Asian neighbors
are suffering on two fronts. Indonesia, Malaysia, and Thailand are
not only exporting less to China,
they are also forced to deal with
investors exiting from the Indonesian
Rupiah, the Malaysian Ringgit,
and the Thai Baht due to investment
hot money flight.

Dreadful memories are fresh from the 1997 Asian Meltdown Crisis. The debacle
began in Thailand, which suffered a calamity that wiped
out almost its entire national
wealth. This time around, newly
industrialized countries are better
prepared against capital flight.
In reponse to past experience,
they have increased their foreign
currency reserves and reformed
to some degree their banking sectors.
More importantly, their currencies
are no longer pegged to the USDollar. Watch
as they gradually start considering
a peg to Gold, to gain stability.
The current emerging market unease,
disturbance, volatility, and hot
money exits bring emphasis to how
the BRICS countries and the Asian
Tigers still have a long way to
to in achieving industrial strength
and stability in a traditional
Western sense. Some data is alarming. Morgan
Stanley analysts estimate the central
banks of developing countries,
excluding China, lost a total of
$81 billion between May and July
through the selling of dollars
to protect their currencies. These
are intervention initiatives gone
bad so far. The developing countries
are in a tight spot, much like
the United
States. To
curtail rapid capital flight, they
would need to raise interest rates
considerably, but doing so would
cause each national economy to
stall. See the Spiegel article
(CLICK HERE).

◄$$$ NEXT THE UNITED STATES IS LINED UP WITH GRAND RISK OF BECOMING VICTIM
TO HOT MONEY DEPARTURES. THE USTREASURY
BOND MARKET REVERSAL SIGNALS A
SPECTACULAR PARADIGM SHIFT. THE
USTBOND MARKET IS NO LONGER THE
GLOBAL SAFE HAVEN. THE BIG US-BANKS
ARE IN THE MIDST OF A REVERSAL
IN THE LEVERAGED USTBOND CARRY
TRADE. IT IS INSTEAD THE OBJECT
OF REJECTION BY GLOBAL PLAYERS,
AND THE EXPOSED CENTER OF FINANCIAL
CORRUPTION. HOT MONEY WILL DEPART
THE UNITED STATES, A GRAND BILLBOARD
SIGN FLASHES. THE NATION IS TAKING
ON A THIRD WORLD LOOK, COMPLETE
WITH STENCH. $$$

The USFed risks smothering the domestic economy also, but must curtail the
gradual rise in the cost structure,
including the commercial staple
in energy and the household staple
in food. The speculative losses
in the United
States are
enormous, but are not given publicity,
since the press is controlled by
the power brokers. The big US banks engaged in bond
carry trade using free money and
the plentiful USTBond futures contracts
to replenish their balance sheets.
The USFed Chairman Bernanke boasted
of the fast profits filling the
big bank balance sheets in 2010
and 2011 and 2012. But he has turned
strangely and conspiciously silent. The
rise in the 10-year TNX yield from
under 1.7% in May to nearly 3.0%
in September has caused absolutely
gigantic and possibly near catastrophic
losses to the big US banks. Their
profitable carry trade has gone
bad in a big way. With the spectacular
unwind, a powerful transition will
take place, as the US passes into the Third
World. It will be pushed by the
global rejection and exposure of
the corrupted USTreasury Bond market.

The news will be released in due time about the new
big US bank
distress, along with catastrophic
derivative losses from the interest
rate leverage devices. The entire financial maelstrom should serve as powerful motive to adopt the
Gold Standard. It will be adopted,
but only when much more economic
destruction has come, and much
more wealth has been evaporated.
The punctuated message is that
the United States stands at tremendous risk of being
a victim of hot money movement
out of the supposed safe haven,
the corrupted USTreasury Bond
complex. It has become a grand
pit of leverage abuse, sponsored
hyper inflation, final fortress
defensive battle, role program
antics, and propaganda.

◄$$$ BRAZILIAN CURRENCY SURGED AFTER CENTRAL BANK LAUNCHED A MAJOR INTERVENTION
PROGRAM TO STOP THE BLEEDING. THE
NASTY EFFECTS FROM THE USFED MONETARY
INFLATION IS KILLING FOREIGN ECONOMIES.
THE PEOPLE AND INSTITUTIONS PROTECT
THEMSELVES BY HUNKERING DOWN IN
USDOLLARS, WHICH MAKES THE INFLATION
EFFECT WORSE. THE HEDGE PROTECTION
IS MORE PREVALENT THAN ANY CHASING
OF USTBOND YIELD. WHAT IS HAPPENING
IN BRAZIL IS TYPICAL OF MANY EMERGING MARKET NATIONS
(LIKE INDIA).
IT IS UNCLEAR WHETHER WALL
STREET IS AGGRAVATING THE PROBLEM
IN BRAZIL WITH
TARGETED ATTACKS ON THE REAL CURRENCY,
AS IS THEIR CUSTOM. $$$

Little known but with very harmful effects, the Brazilian Real currency has
fallen 20% versus the USDollar
since March, in just six months.
The emerging market nations are
suffering from the extremely harmful
effects of the USFed QE bond purchase
program, better called hyper monetary
inflation. The immediate effect
is to lift the cost structure in
the global economy. The emerging
market nations must contend with
rising business costs and rising
food prices. The defense is quick,
learned long ago. They leave their
currency and hunker down in USDollars.
The response exacerbates the falling
Real currency exchange rate. A
similar drama is playing out in India.

The Central Bank of Brazil responded in late
August with the announcement
of a new official FX intervention
program. They have been officially
taking a big short position in
the USDollar. They are propping their Real currency in the process in a high risk gamble.
Money is moving into USDollars
as safe haven, kind of like going
home to mommy, a learned response
over decades. One must wonder
to what extent the money is chasing
higher USTreasury yields. The
Brazilian Real has been one of
the hardest hit currencies in
the selloff that has slammed
emerging markets this summer,
while bond yields in the United
States have
risen. The first slam was rising
prices, in particular food prices.
The second slam has been the
bond principal losses from USTBond
holders. The story told is again
falsified by the press. The
institutions of Brazil and their natives
are not chasing the USTBonds
for higher yields. The TIC Report
posted for June activity indicated
that Brazil sold a net $12.2 billion in US$-based
bonds, which are always dominated
by the sovereign USTBond. The
press claims they are chasing
yield in US$-based bonds. The
data contradicts the claim. They
are holding USDollars (as cash
hoards) and selling their own
Real currency as a hedge against
the inflation wrought by a falling
Real exchange rate. They are
avoiding and side-stepping a
Real decline with a local inflation
kicker. This is a very domestic
phenomenon, not a global bond
arbitrage tactic at work.

Since May 2nd, the day before the big selloff in the USTreasury market started
and sent yields soaring, the Real
has declined 15% against the USDollar.
Following the Central Bank of Brazil
(BCB) launch of the intervention
into foreign exchange markets to
stem the depreciation of the Brazilian
Real, the effect has so far been
as intended. The Real surged on
August 23rd, up around 2.6% versus
the USD on a single day. The weak
trend is still in place, and must
be addressed. Given the rising
yield environment for USTreasurys,
some analysts expect the money
within Brazil to chase the rising yield in the US bond market. However,
another more accurate view could
be that big losses are being suffered
by Brazilian financial firms on
their bond portfolios. Their sale
and redemption is flooding their
local arenas with USDollars. Analysts
like Marcelo Salmon of Barclays,
co-head of Latin
America economics and strategy,
points the finger at rising USTBond
yields. He believes the key driver
of Real depreciation recently has
been rising Treasury yields due
to the changing outlook for US monetary
policy. Most expect the trend to
continue, which would lead the
Real currency to weaken further.
The Jackass disagrees with this
assessment. The international bond
flows contradict Salmon, whose
paycheck comes from a big Western
bank conglomerate.

Another key driver for Real currency depreciation must be identified. At
risk and in movement is the relatively
large investment by foreign companies
in Brazil's economy. It is estimated at $785 billion. It
is precisely this financial sector
within Brazil that is trying
to hedge currency risk by selling
Reals and buying USDollars. Consider
Bank of America Merrill Lynch
strategists David Beker and Claudio
Irigoyen. They wrote to clients
in early August, "Current
[Brazilian Real] pressure is
mainly due to corporate hedging
and speculative flows in the
derivatives market." Even
they contradict bank analyst
Salmon. They point to such hedging
as motive for the new intervention
program announced by the BCB.
The central bank will offer US$500
million of swaps in the currency
derivatives market on a daily
basis (4 days/week) for the rest
of 2013, in addition to $1 billion
of FX spot lines on Fridays.
The BCB is accumulating a giant
short position in the USDollar.
Later, they will struggle to
unwind, amidst massive losses.
They must switch to the Gold
Standard if they wish to survive
the possibly financial storms. The
BCB decided to conduct the majority
of the intervention for Real
support in the derivatives market
as opposed to the spot market.
The reason for this strategy
is also worrisome. In the
spot market defense, the central
bank would burn through the USDollar
shelf of its foreign reserves.
In the derivative defense, foreign
reserves do not come into play.
Think huge uncollateralized casino
bet. The volume of Brazil's FX reserves is US$374
billion currently.

What is happening with Brazil will be repeated across
the emerging market nations. A
broader policy shift has begun
in these high growth nations which
are being slammed by the USFed
monetary policy and Taper Talk,
as bond yields go into reverse.
Sebastian Brown of Barclays summarized.
He said, "Beyond the immediate
effects on Brazil,
we believe that the BCB's actions
could have broader implications
on the price action of high carry
emerging market currencies, such
as the Turkish Lira, South African Rand,
Indonesian Rupiah, Indian Rupee,
and particularly the Mexican Peso.
The BCB's decision to intervene
could be interpreted as a signal
that the tolerance for weaker exchange
rates across emerging markets is
close to running out, given some
evidence of increasing inflationary
pressures." By High Carry
is meant borrowed cheap USDollars
used for investment purposes, the
potential hot money. See the Business
Insider article (CLICK HERE).
The uglier side of the story is
that Wall Street trading desks
are using numerous small currency
trading marts to slam the emerging
market national currencies, pure
vengeance, basic hidden pernicious
USDollar defense. Their actions
in India are being publicized
in this respect. The USGovt wants
a stronger USDollar, even if it
wrecks the foreign nations.

◄$$$ PERU HAS EMERGED AS A GLOBAL
USDOLLAR COUNTERFEITING EXPERT.
USING ADVANCED PRINT TECHNOLOGY
AND YOUNG WORKERS, THE LABS PUT
OUT A GOOD PRODUCT. IF THEY COULD
ACQUIRE THE HIGH QUALITY COTTON
FIBER PAPER, THEIR WORK WOULD BE
ALMOST UNDETECTABLE. THE BUSINESS
HAS HIGHER PROFITS AND LOWER RISK
THAN COCAINE. THE COUNTERFEIT PAPER
BILLS ARE SPREAD TO THE UNITED
STATES AND SOUTH
AMERICA. $$$

LimaPeru is the home for numerous highly profitable
counterfeit labs that put out some
excellent product, fake US$ bills.
They employ young kids who recycle
from police precincts to other
labs, due to underage status. The Peru labs use standard paper and high quality
lithographic printers, with hand
finishing, light varnish, and wear
machines to give them the non-new
look. They even insert security
strips with precision needles,
and apply glue with precision syringes. The
US$100 bill is their specialty,
since cost is the same per bill,
but value varies by designated
denomination. But they produce
Euro bills as well. With its meticulous
criminal craftsmen, cheap labor
and, by some accounts, less effective
law enforcement, Peru has in the past two years overtaken Colombia as the
#1 source of counterfeit USDollars,
according to the US Secret Service.
They operate as protector of the US currency, and to ensure that the CIA owns
plenty of counterfeit tools. Since
opening a permanent office in Lima last year, only its fourth office in Latin America, they have
assisted in helping Peru's
police arrest 50 people on counterfeiting
charges.

Over the past decade, $103 million in fake USDollar
bills have been seized, made
in Peru, the majority since 2010. A USGovt officer was impressed and
commented, "It is a very
good note. They use offset, huge
machines that are used for regular
printing of newspapers, or flyers.
Once a note is printed, they
will throw five people on it
and do little things, little
touches that add to the quality." Most
of the counterfeit cash from Peru heads to the United States. Some is smuggled to nearby countries
including Argentina, Venezuela,
and Ecuador. Demand is particularly
great in Argentina and Venezuela,
because currency controls make
the USDollar so coveted. In those
countries, they mostly circulate
in the black market. As pressure
on prosecution in Colombia increased, the labs migrated to Peru. In fact, the US$
bill counterfeit business is
much more profitable than cocaine,
which has higher overhead, with
more complex distribution, and
stiffer criminal penalties. The
profit margin is 20% generally
for producing the fake bills.

The Peruvian labs use software such as Corel Draw or Microsoft Powerpoint.
Then comes photo-lithography, the
etching of metal plates, offset
printing, and finishing. Devices
are used with coarse fabric and
light sanding to give the bills
a rough texture and slightly used
look. It takes four or five days
to make $300,000 in counterfeit
notes, claims the investigator.
The typical destination is US retail stores, where clerks are less vigilant.
Only $100 bills are shipped to
the United
States, while
$10 and $20 bills are sent to Peru's neighboring
countries. Latin America has broadbased
obstacles in the general economy
(apart from banks) for passing
any US bills over $20, something
seen routinely by the Jackass on
signs at register counters.

The counterfeit labs in Peru have one stark flaw
in their output. Most banks use
infrared scanner to authenticate
currency. The labs continue
to rely upon standard bond paper,
found in office supply stores.
They are detected by the scanners,
and will disintegrate when wet. The
standard USDept Treasury US$ bills are made from a combination cotton
parchment called rag paper, which
contains unique ingredients that
can be identified during analysis.
Lima Inspector said, "The
day the [Lima labs] get rag paper and perfect the finish a bit more, their
bills will go undetected." See
the Huffington Post article (CLICK HERE).

One must be reminded of the dunce dolt dopey John Snow, first Treasury Secretary
in the Bush Jr Admin. He once said, "The
sign of a strong currency is the
difficulty in being counterfeited." Funny,
a reputable economist might believe
strong industry and a healthy Current
Account would be more important,
certainly a Gold backing. By the
way, in my view, John Snow with
his CSX Railway experience was
a curious choice at Treasury in
the Bush Jr Cabinet. Without
a doubt, Snow was selected to improve
the logistics for shipping narcotics
from Afghanistan to
European NATO bases and then into
the United
States and Great
Britain. Once
the Dubai Ports World controversy
broke into the open, Snow was replaced
by Hank Paulson of Goldman Sachs.
The USDept Treasury priorities
shifted from narcotics distribution
exploit to Wall Street bond fraud
exploit. The narcotics production
and trafficking role by the USGovt,
with attendant money laundering
by Wall Street banks, is as big
a story as the 911 Coup d'Etat
behind the World Trade Center
bank heist.

## ANTI-USDOLLAR ALTERNATIVE

◄$$$ CHINA AND HUNGARY SIGNED A CURRENCY SWAP DEAL, ONE MORE
STEPPING STONE AWAY FROM THE USDOLLAR.
GRADUALLY EUROPE
IS COMMITTED TO A NON-USDOLLAR
TRADE SOLUTION, A MEANS TO WEAN
OFF THE GREENBACK. FEW ANALYSTS
GIVE MUCH EMPHASIS TO THE YUAN
SWAP DEVICE WHICH UNDERMINES THE
USDOLLAR AND PREPARES FOR ITS LOSS
OF GLOBAL RESERVE STATUS. THE SWAP
IS A FORM OF BARTER, AN INTERMEDIATE
STEP TOWARD FULL FLEDGED GOLD TRADE
SETTLEMENT. $$$

The Peoples Bank of China (PBOC) announced in early September a currency swap
agreement worth 10 billion yuan
(=US$1.62 bn) with the Hungarian
central bank. The agreement will
stand in place for three years,
subject to extension. It is designed
to strengthen bilateral financial
cooperation, to promote trade and
investment, even to jointly maintain
regional financial stability. On
its own, the pact is insignificant,
since Hungary is a small nation
with only 10.0 million people in
command of a $196 billion economy.
However, one by one the European
nations are locking entry into
the China corrall. A critical
mass is coming for Europe alone,
after France, England,
and Germany have signed Yuan
Swap agreements. Spain already
has strong cooperation. The corrall
has recent entries with Japan, Australia, New
Zealand, Russia, Belarus, and other nations. One by one, a global
critical mass is forming which
will isolate the toxic USDollar.
See the China Org article (CLICK HERE).

The Yuan Swap Facility is not fully appreciated by Western analysts. It is
important for three reasons. First,
it enables nations that engage
in trade with China to conduct the settlements among their
major banks on a net basis, outside
the USDollar shadow. Second, it
represents barter, without a third
party participant. In its own right
it serves as a significant avoidance
mechanism for the USDollar and
its bank choke channels. Third,
as more nations sign on with the
Yuan Swap device, the transition
from a wide array of bilateral
trade settlement arrangements will
be easy toward full fledged gold
trade settlement. None of the three
factors is appreciated by US and London
analysts, fully enthralled with
their own importance, with mirrors
to admire themselves and honors
to bestow to themselves as their
financial world craters.

◄$$$ INTRODUCTION OF ASSET-BACKED CURRENCIES MUST BE DONE BY A GROUP
HAVING CRITICAL MASS. IF NOT, THEN
ANY NEW SUCH CURRENCY WOULD DIE
QUICKLY FROM ITS SUCCESS. A CRITICAL
MASS IS ESSENTIAL FOR A NEW VALID
ASSET BACKED CURRENCY TO TAKE ROOT.
WATCH FOR TWO OR THREE NEW GOLD
BACKED CURRENCIES TO BE LAUNCHED.
THE EFFECT WILL BE SEVERE ON THE
PRESENT DAY LEADING PAPER CURRENCIES
AND THEIR CAPTIVE NATIONS. THEY
WILL BE CUT OFF. $$$

A powerful movement has been in progress for at least two years, intended to
build a majority consensus for
a USDollar alternative in trade
and banking. The movement has been
slow to occur, since it requires
a majority participation. It must
form a critical mass of participating
nations, or else wait until such
a majority forms. The process is
extremely delicate to install a
new currency, in particular a valid
one with tangible backing like
with commodities. Better yet to
back the new valid currency with
Gold & Silver, the monetary
metals. If just one or two or three
nations install a gold-backed currency,
it would fail. The failure would
be assured from fast rising valuation,
which would force great loss in
export trade from higher priced
exported products. The positive
rub of lower import costs is in
no way sufficient, since no nation
is an island in the modern age.
Over half the world must adopt
the usage of the new valid asset-backed
currency. It must be adopted by
a critical mass in order to avoid
the deadly high valuation effects,
which would ravage the economies.
A tremendous challenge to organize
and gather in participating member
nations for the rebellious movement.
They must withstand attacks like
in India,
which has been cooperating with Iran in
gold trade for energy sale settlement. As
more pain is felt from economic
damage and financial structure
decay, the participation level
will rise, and has risen.

The entire Iran sanctions are about
movement away from the USDollar
in trade payment systems, transformed
by the fascist bankers and their
poodle governments into a phony
terrorist threat. The threat is
real, but to the USDollar. The
challenge is heightened to enlist
participating nations, since the
economies and banks are in rapid
ruin. The motive to join the new
currency becomes obvious easy natural,
eventually seen as a matter of
survival. Once critical mass has
been assembled, the follow-on challenge
is to build platforms and linkage
systems. As a consequence of
not belonging to the critical mass,
the tables are turned on the former
bank masters with loyalty to the
Old Guard bound to the USDollar,
Euro, BPound, and Yen. Outsiders
will see a fast falling currency
valuation, with tremendous price
inflation inside their domestic
economies. The non-participants
will be thrust into a veritable Third
World.They will suddenly
find themselves outside looking
in. The transition is extraordinarily
difficult for political, technical,
and sabotage reasons. The new adopters
are labeled as terrorists in false
accusations and misdirected propaganda.
To vilify those nations that wish
to avert the toxic unsound USDollar
seems destined to fail. The current
regime that presides over the USDollar
and major fiat paper currencies
is powerful, with military and
news network support. However,
they preside and rule on a sinking
ship.

The Jackass belief is that a stronger asset backed currency
will come, which will lead to
other similar asset backed currencies
to follow quickly afterwards. The initial such currency might be the Chinese Yuan,
by most indications. The G-20
nations with the BRICS nations
and Shanghai Coop in support
appear to be working toward the
Yuan as a gold-backed solution,
a viable vehicle with no debt
underpin. Actually, it could
arrive in the form of a Gold
Trade Note that serves as Letter
of Credit within the Gold Trade
Settlement scheme and format.
My belief is that in order to
succeed, a group of asset backed
currencies must be launched.
They might be the Chinese Yuan
joined by the Russian Ruble and
new Nordic Euro. Do not expect
any new USDollar to be launched
with a gold backing. The entire
USGovt and USEconomy is so deeply
saddled with debt, that it cannot
conceivably make a transition
to a viable secure currency.
Besides, the Clinton-Rubin Gang
pilfered all the gold bullion
in Fort Knox,
which now contains nerve gas
in storage. The dynamic is very
clear. If not a critical mass
core as a group that adopt such
stronger currencies, then they
will fail from success, seen
in a fast rise in valuation,
followed by loss of export trade.
They would not be launched unless
in a large group. Then the risk
is lost export trade to the new
dwellers of the Third
World, who could not afford to
purchase costly imports. However,
if a critical mass core is launched,
then the other non-participating
currencies will die a sudden
death from nasty devaluation
and rampant price inflation.
They can start anew within the
Gold Standard, and give a proper
hanging to their stubborn criminal
leader class.

◄$$$ A QUICK NORDIC EURO UPDATE. THE NEW CURRENCY IS DESIGNED FOR GERMAN
USAGE ALONG WITH ITS CLOSEST TRADE
PARTNER NATIONS. IT HAS BEEN DELAYED,
NOT SCUTTLED. MANY ARE THE EVENTS
TO DELAY AND OVERWHELM THE PRIORITIES.
THE NEW EURO HAS BEEN AGREED UPON
IN A CONCRETE DEAL, NO CHANGE,
NOTHING ALTERED. $$$

The introduction of a Nordic Euro for usage by Germany, Austria, the Netherlands,
and Finland was
cited by the Jackass back in 2009
originally. Much work behind the
curtains has been done, extensive
connecting platforms in the making.
While people could regard it to
be a wrong forecast, it only appears
to be incorrect. Getting the timing
right on certain issues is an extreme
challenge during the unfolding
chronic global financial crisis,
since a new crisis crops up every
few months. The priorities shift,
so as to manage the next fire,
while the project is put off. The
Voice has assured in recent weeks
that the decision for introducing
the Nordic Euro has been made and
nothing has been altered. However,
major events have taken over certain
plans. He wrote, "If Germany, Holland, Finland,
and Austria do not move to the Northern Euro, then Germany will leave the Euro Monetary Union. Not because they want to, but because they have to save the
Euro itself." The
statement is profound and perplexing,
not to be explained further. Germany is
likely to take the Euro, trim off
the peripheral fat, and improve
its core, then turn East for partnership.

◄$$$ THE REBELLION IN TRADE SETTLEMENT IS HEATING UP IN ACTUAL TRANSACTIONS
BEING COMPLETED. THE PATTERN HAS
BEEN ESTABLISHED WITH IRANIAN TRADE.
A STRANGE IMPETUS COULD COME VERY
SOON BY THE BRICS NATIONS AND OTHER
NATIONS THAT FOLLOW THEIR LEAD.
IT COULD CENTER ON CRUDE OIL AND
ENERGY TRADE. DEFIANCE
AGAINST THE USDOLLAR AND ITS CURRENCY
REGIME IS COMING TO A HEAD VERY
SOON. IRAN IS THE KEY, SINCE SUCH
A HUGE ENERGY PROVIDER WITH GIGANTIC
RESERVES. $$$

My reliable colleague EuroRaj is exceptional in his analysis. He shared some
thoughts about the fracture of
the Petro-Dollar, which he anticipates
will occur within the BRICS nations
of Brazil, Russia, India, China, and South Africa. In his view, the fracture might
occur in response to a rising crude
oil price. If and when the price
of oil goes toward $150 per barrel,
he expects the emerging market
(EM) nations of the world will
stop buying it in the G-7 currencies,
namely USDollars, Euros, BPounds,
and Yen. The emerging market
nations are becoming collectively
so powerful that they have earned
a new acronym of EM, a term that
appears widely in the financial
press. The EM nations have won
respect and legitimacy by virtue
of their industrial base and growing
FOREX reserves. The EM world is
ready for barter trade with final
net settlement in Gold. The pact
has been decided, but the details
are being forged in new systems.
The distractions are many to the
G-20 Meeting working groups, and
for good reason. The G-7 Nations
realize that the Eastern
Hemisphere has made commitments,
and has made progress in the rebellion
against the floating currency regime.
EuroRaj believes the EM nations
will permit the United
States to
be the catalyst that forces the
great change on them. They can
later blame the disruption on the
USGovt and move to a new system
as they step over the rubble.

EuroRaj expects the Saudis to be steadfast but play the fence carefully. They
can collect their $150 oil price
from the US partners
in the fragile Petro-Dollar convention
under grave threat. The United States, England,
and Western
Europe will continue to pay the
Saudis in US$ terms. The key change
agent has been Iran. The important duo of China & India will
ramp up exports from Iran and
make payment in reciprocal trade
and gold on a net basis. One
by one, Western Europe will break
away and work toward the Yuan Swap
device, then outright gold trade
settlement on a net basis with Iran. He expects France will get cold feet
at the last minute. The USGovt
cannot brand all of Western
Europe as terrorist nations, a
consequence of the critical mass
grown from consensus.

Some Iran factoids are important to be listed and
absorbed. Iran is
sitting on the #2 natural gas reserve
and the #3 oil reserve in the world. Iran controls 35% of the oil provided to the entire
world and more than half of the
amount provided to China through the Hormuz Strait, which is a strategic pathway
of energy. Iran is
the origin of an important Gas
Pipeline to Pakistan and India. Iran is
the origin of an important Gas
Pipeline to Western
Europe, through the Syrian port.
Thus its importance in capturing
the European market for the Eastern
Alliance that includes not only Iran but Russia and
its Gazprom giant, the owner of
a vast network of gas pipelines
extending to SouthEast Asia and Western
Europe. The critical importance
of Syria is
seen through a pipeline lens.

◄$$$ THE RENEGADE BRICS BANK IS MAKING PROGRESS. THE BRICS NATIONS HAVE
AGREED TO CAPITALIZE THE DEVELOPMENT
BANK INITIALLY AT $100 BILLION,
THE DEAL FORGED ON THE EVE OF THE
DISRUPTED G-20 MEETING IN MOSCOW.
THE CRISIS MANAGEMENT FUND HAD
BEEN AGREED UPON A FEW MONTHS AGO,
EARLY IN 2013. THE DEVELOPMENT
FUND (AKA THE BRICS BANK) IS SEPARATE,
DESIGNED FOR IMPORTANT PROJECTS.
IT WILL MORPH INTO A GOLD PURCHASE
FUND FOR THE CONVERSION OF USTBONDS.
$$$

The BRICS nations have forged an important agreement, to fund their development
bank with $100 billion. The plan
is to fund planned joint development
ventures, like railways, highways,
and communication systems. The
fund is a direct affront to the
current Western bank appendages.
It is to rival the dominance of
the World Bank and the IMF, basic
harlot tools. The introduction
of the fund was timed with the
opening of the Moscow G-20 Summit.
In St Petersburg Russia, President Vladimir
Putin blessed the initiative to
create a BRICS FOREX reserve pool.
The size of its capital has been
agreed at $100 billion. The details
were thorny, but done finally. Russia,
Brazil, and India will
contribute $18 billion to the BRICS
currency reserve pool, while China will put up $41 billion, and South Africa $5
billion, according to an official
press release issued by the BRICS
nations. More work must be done.
The Russian Finance Minister Sergei
Storchak stressed that many difficult
details must be sorted out. He
said, "These are complicated
systematic themes, wherein negotiations
are difficult. We must assume the
bank will not start functioning
as fast as one could imagine. It
will take months, maybe a year." In
June Storchak estimated the project
would be functional by 2015. The
scheme was approved in Durban South Africa
at the BRICS summit in 2013.

The two BRICS funds are actually confused in their makeup. Several months ago,
the Crisis Management Fund was
announced, with pledges of committed
funds. The recent press release
mentioned that the bank is designed
to finance infrastructure and development
projects in the BRICS countries,
AND to pool foreign currencies
to defense against any future financial
crisis. Russian Foreign Minister
Sergei Lavrov emphasized that the
bank will work to avoid the negative
impacts from fluctuations in currency
markets, related to the powerful
global financial crisis. Furthermore,
the creation of the reserves pool
will improve the position of BRICS
nations in their drive to reform
votes and quotas in the International
Monetary Fund. The IMF currently
is tilted in inequitable manner
toward the United States, its 17% share vote sufficient
to veto any decision, since passage
must receive 85% of the vote.

The BRICS nations represent a viable critical force in terms of the world finances.
The $6.1 billion trade just within
its own five nation group amounted
to 16.8% of global commerce. The
BRICS nations account for 43% of
world population, around 18% of
its GDP, and 40% of its currency
reserves. China owns
well over half their combined reserves. Their
increased economic muscle has been
matched by a stronger voice across
all areas of global affairs. The
Russian & Chinese duo has put
its full weight behind the BRICS
agenda, giving it power. See the
Reuters article (CLICK HERE)
and the RTNews article (CLICK HERE). As footnote,
consider the entry of South
Africa, although
small, since it is a major gold
producer!!

Notice that China contributes more than
twice other nations. Russia contributes surprisingly little, considering
its commodity wealth. Wait until
the critical mass of Eastern trade
occurs. The first $100 billion
will be significant in the BRICS
Development Fund. The second $100B
will be quick, and the third and
fourth $100B will be a snap. First
the Russians, Chinese, Indians,
and Brazilians need to establish
the path and set the course. Expect
the Obama Admin to promise to end
QE to Infinity, the monetary inflation
dread that is causing tremendous
financial and economic problems
across the entire BRICS nations.
The USGovt will then be caught
in lies, and thus remove its justification
for additional obstruction of the
BRICS agenda. Big lies and
big bombs are all the United States
has anymore in foreign policy,
its most outstanding characteristic
besides the monopolized money printing
machinery (with Weimar nameplate)
and profound bond fraud that is
no longer undiscovered.

◄$$$ THE FINANCIAL MEDIA IN FRANCE GAVE DISRESPECT TO
THE BRICS FUND AND ITS ENTIRE MOVEMENT,
INDICATING NO PERCEIVED POWER OR
STRENGTH AMONG EMERGING MARKET
NATIONS. THE WESTERN NATIONS WILL
BE CAUGHT FLATFOOTED IN WHAT COMES.
THE COMMENTARY TEEMS OF ARROGANCE
IN THE WEST, AND SHOWS IGNORANCE
OF THE FULL IMPACT OF THE UNENDING
FINANCIAL CRISIS HEAPED ON OTHER
NATIONS BY THE WESTERN BANKERS.
$$$

The following is from PatrickH in France, a longstanding Hat Trick Letter subscriber.
He wrote the message in late August. "I
was listening today a French radio
economic broadcast whose people
(including Jacques de la Rosiere,
an old IMF whore) who were all
laughing about the new BRICS Development
Fund which was approved today with
only a $100 billion initial input.
It was a very small amount regarding
the reserves held by the BRICS
at their own central banks. Another
person added that there was no
common global policy coordinated
by the BRICS to make important
changes. Furthermore, the global
economical matters such as developing
countries flows of funds can be
destabilized by the USFed actions
(or speech). Globally it seems
in their viewpoint that nothing
important will really change in
the next few years on the economic
planet, and the G-20 is a completely
worthless organization. I am really
fed up with these people. I hope
you will be right about what the
BRICS may intend to do." Patrick
refers to the eventual morph of
the BRICS Development Fund into
the BRICS Bank, whose function
later will take on the critical
disruptive role of converting USTBonds
and EuroBonds into Gold bullion,
as the bank removes its facade
and emerges as the BRICS Gold Trade
Central Bank. Their actions could
very possibly usher in the return
of the Gold Standard, but through
trade, not through banks and currency
markets.

◄$$$ INDIA IS PUSHING THE BRICS
NATIONS TOWARD A SHOCK & AWE
CURRENCY PLAN TO SAVE THEIR ECONOMIES
AND FINANCIAL STRUCTURES. THEIR
AGENDA POINTS OUT THE JACKASS THEME
THAT A NEW VIABLE BACKED CURRENCY
MUST HAVE LARGE CRITICAL MASS,
OR ELSE IT DIES FROM SUCCESS IN
TOO LIMITED AN APPLICATION (THE
BACKFIRE RISK). A COORDINATED DUMPING
OF USTBONDS AND EUROBONDS WOULD
CAPTURE ATTENTION, BUT INFLICT
DAMAGE ON THE NATIONS THAT ORDER
THE MASS SELLING OF SOVEREIGN BONDS.
A CATCH-22 IS UNDERSTOOD. IT WILL
THEREFORE GATHER MOMENTUM FROM
NEW PARTICIPANTS. $$$

India has turned on the Urgent Button
in emergency. It is officially
advocating for joint Shock & Awe
intervention by key developing
nations. The BRICS nations must
halt capital flight and shore up
currencies. They must take action,
but the reaction risks a severe
backfire that could trigger a vicious
spiral. Both Brazil and India have reached their
limit in standing by to observe
staggering damage to their economies
and financial structures. A top
Indian official named Dipak Dasgupta
told Reuters that a powerful coordinated
intervention move would occur soon.
He indicated that China, Brazil,
India, Turkey, Russia, and South
Africa have all been squeezed in
the last two or three months, ever
since the USFed threatened to reduce
the QE bond purchase monetization
program. Without joint action,
no intervention would be meaningful
or have required impact. The BRICS
nations and others in concert must
deploy their substantial reserves
and provide opposition to what
they perceive to be speculators,
who rush to remove their hot money.
Without joint action, the nations
in the BRICS yard will be wrecked
one by one. They will sell USTreasury
Bonds held in ample reserves, and
buy their own currencies. They
would do well to diversify reserves
and buy Gold also.

While a simple BRICS currency support initiative might not accomplish much,
the more crucial development is
the motivation for collective action.
They might spend some reserves
to counter the exit of hot money
and to counter the desire to hedge
against falling domestic currencies. However,
later on, like within months, the
coordinated action will be to convert
reserves to Gold and to fortify
the BRICS currencies with more
gold reserves! The seemingly
intractable problem is that any
broadbased sale of USGovt and European
Bonds would push up yields, whereas
rising yields started the frenzied
process in the first place. Yet
such a viewpoint might not be totally
correct. The problem is not an
actual end of USFed easy money
in staggering bond purchase endless
programs. It is the threat of such
end, a tapering of its volume.
So the USFed might intend to talk
of tapering much more than it plans
to cut back on bond purchases,
just to screw up BRICS nations
that hold substantial USTBonds,
and to keep them off-balanced.

When it becomes clear that the USFed is stuck in QE
to Infinity, and has lost its
credibility, taking an opposing
stance to the United
States banker
fortress will be more successful. Also, the USDollar might endure declines from lost
global prestige, more than it
finds support from rising bond
yields. The Jackass belief is
that foreign BRICS national currencies
are not falling from the rising
USTBond yields, a story told
by the biased Western financial
press. The BRICS currencies
are falling from movement of
hot money and from intense hedging
by their domestic corporate firms. Like
the Brazil Real, the Indian Rupee
is in a veritable freefall. It
has declined by 25% in the last
several months to a record low
of 68.84 against the USD in recent
trading. Its Current Account
deficit stacks up to 4.8% of
GDP last year. India needs
large inflows of capital to cover
its short-term external debt,
yet hot money is leaving. The
Indian Govt officials have made
a complete mess of policy, throwing
money around like candy before
the elections to win votes. They
should begin the reforms before
embarking on a risky intervention.
See the UKTelegraph article by
Ambose Evans-Pritchard (CLICK HERE).

◄$$$ INDIA COULD PLAY A VITAL
ROLE IN INTRODUCTION OF THE GOLD
STANDARD. IT ALREADY USES GOLD
IN BANK COLLATERAL. ITS OFFICIAL
POLICY IS A WALL FOR GOLD ENTRY
ERECTED AT THE BORDER, OBSTRUCTIONS
FOR GOLD BUYING AT INTERIOR BANKS,
WHILE GOLD COLLATERAL IS USED FOR
CREDIT AT BANKS, LARGE AND SMALL.
THE NATION HAS THOUSANDS OF YEARS
IN EXPERIENCE WITH GOLD TRADE AND
GOLD AS SAVINGS. THE JUMP TO GOLD
TRADE SETTLEMENT WILL BE QUICK.
THEIR ALLIANCE
WITH IRAN IS FIRM. $$$

The following is a conclusion from EuroRaj, who has extensive bank and economic
analysis experience as it pertains
to India, Turkey, and Iran. His thoughts, my edits. The gold backed
loans via jewelry shops has been
in place for centuries. The
jewelry shop in a village acts
like a useful combination of a
jewelery store, a bank, and a pawn
shop in an effective system arrangement. But
jewelry is very difficult to rate
on quality and authenticity. For
instance, a determination must
be made on whether a hallmark item
in hand is 90%, 95% or 99% gold
in content. Hence it is very difficult
to transact, and has essentially
very little liquidity. However,
when dealing with hallmarked gold
jewelry products, a firm degree
of authenticity is introduced that
enables brisk liquidity. That
is the beauty of the move for Indian
banks to work with hallmarked gold
as collateral.

Similar standards are the case among commercial banks and central banks, with
the LBMA being the central clearing
market in London.
The important current development
is the recent practice where hallmarked
gold items are introduced at the
micro level. The local businesses
can deal directly with banks. Essentially India is
signaling to the BRICS and the
emerging market (EM) world that
the gold based trading system is
ready and can be integrated with
bank functions at the credit level. Securitized
lending, whether gold, farms, parmesan
cheese, whisky barrels, foundries,
mines, homes, it has been there
since centuries. The USDollar and
its fiat currency regime that features
a small gaggle of floating unstable
major currencies is but a small
aberration in the history of time.
People tend to forget, the fast
collapsing floating currency system
was only introduced in 1971. It
has outlived its usefulness. Worse,
the floating currencies backed
by sovereign debt are a cancer
acting to destroy capital. Nations
are beginning to react. They will
find the Gold Standard as the solution.
They are desperating seeking solutions.
They are desperating planning counter
measures. It is not an island,
but a continent that will isolate
the United States and its USD
skull & crossbones banner emerges
as an island.

## BANKS DUE FOR DERIVATIVE LOSSES

◄$$$ BANKS ARE STILL SEEN AT RISK FIVE YEARS AFTER LEHMAN COLLAPSE. WHILE
THEY APPEAR TO HAVE TWICE AS MUCH
CAPITAL VERSUS 2008, THEY HAVE
MUCH ASTOUNDING GREATER DERIVATIVE
RISK. THE PROPPING OF THE USTREASURY
BOND BUBBLE PUTS THEM AT TREMENDOUS
IMMINENT RISK. $$$

The big US banks are on the edge of total annihilation
with few realizing their current
risk. The consensus is that the
big banks remain at risk, five
years after the Lehman collapse.
At the same time Fannie Mae and
AIG fester under the USGovt roof,
for protection of their bond fraud
and presidential thefts, never
having been fully examined. Doing
so is banned. The analysts and
internal officers share a robust
rosy view on the strength of the
big US banks,
a view that is not warranted. They
focus too much on the working capital,
the cash reserves, the loss reserves,
the asset base, but overlook the
derivative exposure and the big
item, leveraged USTreasury Bonds
in a highly leveraged sponsored
carry trade. Some like Morgan Stanley
believe their initiative to boost
capital and cut risk is a big success.
The analysts call the Wall Street
giants safe enough to survive a
shock that devastated the big banks
like in the late 2008 barrage.
Do not believe the favorable outlook. The
big US banks are still insolvent
hollowed structures with phony
accounting and huge derivative
risk off the balance sheets. They
sit on a massive mountain of derivatives,
precisely when the TNX has gone
from 1.6% in May to almost 3.0%
in September. Derivatives break
down when much smaller moves occur
in the 10-year bond yield, like
last year with the London Whale.
The current TNX moves are twice
the whale's ripples.

While the six largest US lenders have almost doubled
their capital since 2008, even
some Wall Street veterans say it
is not sufficient. They see a system
still too leveraged, complicated
and interconnected to withstand
a panic, and regulators unprepared
and unwilling to head off another
deluge of losses and suddenly insolvency
events. The analysts do not
anticipate any losses from the
frail interest rate derivative
structures that are stressed to
the limit, far more than for
the London Whale episode. They
do not learn from basics like a
much bigger move up in TNX bond
yields. They do not learn from
even the recent past, like last
year. Clearly the analysts are
paid not to see what is before
their noses. They are part of the
Wall Street promotion machinery.

The official explanation for the crisis that exploded in 2007 and 2008 reads
like a Polyanna edited fable. The
villains are identified as homeowners
borrowing beyond their means, banks
selling subprime mortgages, government
supported agencies backing too
many loans, Wall Street packaging
them for overzealous investors,
ratings firms giving seals of approval,
regulators offering little objection,
and politicians encouraging the
procession over the cliff. They
leave out the mortgage bond fraud,
the counterfeit of Fannie Mae bonds,
the MERS title database that permitted
duplicate income streams (and thus
far more bonds to sell), and the
encouragement to banks by Wall
Street to falsify securitization
documents. They overlook the biggest
villain of all. The blessings
by former USFed Chairman Greenspasm
for both the acceptable dependence
of the USEconomy on home equity
removal for sustenance of the USEconomy,
and the sophisticated risk off-load
via derivatives, both contributed
mightily to the bond market collapse
and prolonged financial crisis. The
lunatic dependence was deadly and
the faulty sophistication was lethal.
The knighted chairman sabotaged
the USEconomy, and received accolades
from the Queen. Thus the Jackass
conclusion of deliberate crush
of the United
States.

Three fundamental flaws stand out, present in 2007 and
2008, still present today. 1) Regulators still permit banks
to embrace too much risk, simply
in different instruments now.
2) Insufficient bank capital
still with inadequate margin
for error, simply different risk
now. 3) A system still too large,
opaque, and interconnected, with
everpresent catastrophic risk
prevalent. A final flaw is new.
Banks and financial firms are
permitted to mark their assets
to model or myth, something the
FASB accounting practices did
not permit five years ago. The
other grandiose change to the
landscape, not present five years
ago, is the two full years of
ultra-low long-term USTreasury
Bond yields, held in place, fortified
with obscene leverage, by the
interest rate swap derivatives. They
will break down. This derivative
swap will unwind like a bottled
nuclear bomb with metal fragments
across the entire banking sector.
See the Bloomberg article (CLICK HERE).

◄$$$ BANKS EXPECT TO SNATCH THIRD QUARTER PROFIT BOOST FROM DIPPING INTO
LOAN LOSS RESERVES. THE QUALITY
OF EARNINGS WILL BE LOW, BUT THE
FOCUS HAS ALWAYS BEEN ON THE REPORTED
EARNINGS PER SHARE. $$$

Top US banks will book $billions in profit in the
third quarter from funds they set
aside in Loan Loss Reserves. The
big US banks like JPMorgan Chase,
Wells Fargo, and Bank of America
justify the raid on better home
loan payment performance. The practice
of releasing reserves is entirely
legal, just bad judgment. Amidst
a slowdown in mortgage underwriting,
the rise of litigation (lawsuit)
costs, near nil investment bank
operations, and scant commercial
loans, they will need to raid reserves
in order to show profits. They
will lose their Credit Value Adjustment
fictional profits, since prevailing
bond yields have risen. These firms
have used free cash to buy their
own shares also, thus reducing
the outstanding shares, which tends
to amplify earnings per share.
Research firm Portales Partners
estimates that the 16 major banks
it covers have $14.7 billion of
reserves that could be tapped,
converted into earnings. The Street
knows the earnings are not quality
and not repeatable. They actually
are repeatable until the Reserves
are drained. See the Yahoo Finance
article (CLICK HERE).

◄$$$ THE BIG US-BANKS ARE CUTTING JOBS WITH A GIANT MEAT CLEVER IN THEIR
MORTGAGE UNITS. THE WRITING ON
THE WALL FROM THE DEPRESSED USECONOMY
IS PLAIN TO SEE. THEIR DECISIONS
CONTRADICT THE SUPPOSED HOUSING
MARKET RECOVERY. $$$

Citigroup announced plans to cut over 2000 jobs in their mortgage unit. In
like kind, Bank of America revealed
plans to cut over 2100 jobs in
their mortgage unit. Wells Fargo
has other job cuts in suit, from
their mortgage unit. Bear in mind
that their economists and the clownish
USGovt economists steadily talk
of a recovery in progress, albeit
stubborn. They have pointed to
a housing market recovery for months,
which the Jackass has disputed.
The recession is stubborn in reality,
bordering on a defined depression.
When over 20% of the able bodied
workforce is unemployed, month
after month, it qualifies as a
depression. See the Fox Business
article (CLICK HERE)
and the Bloomberg article (CLICK HERE).

◄$$$ JUNK DEBT EXCEEDS $2 TRILLION IN RESPONSE TO ULTRA-LOW CENTRAL BANK
BOND YIELDS OFFERED. JUNK BONDS
HAVE BECOME THE SECONDARY BOND
BUBBLE. OUTCOME IS ASSURED, IN
VAST WRECKAGE DURING THE NEXT PHASE
OF THE ONGOING CRISIS. $$$

Only three decades were required for the volume of high yield debt securities
to reach $1 trillion. It took about
seven years for the dicey speculative
grade debt to reach $2 trillion.
Always in line for a slaughter,
investors have sought relief from
the paltry bond yields by hunkering
into the high yield bond market.
When the damage for the supposedly
safe pristine USTreasury Bonds
comes in the form of losses, compounded
by carry trade reversals, magnified
by the linked interest rate derivative
losses, the junk bond losses will
register, and grab headlines. It
is like a harvest in the early
autumn from the bounty of summer,
only in reverse. See the Bloomberg
article (CLICK HERE).

◄$$$ JPMORGAN WILL ACCEPT A $700 MILLION FINE OVER THE LONDON
WHALE FIASCO. MORE FALLOUT IS TO
COME. THE HIDDEN LOSSES ARE AN
ORDER OF MAGNITUDE GREATER THAN
WHAT THE PRESS CITES OR THE CASES
INDICATE. THE BRIBERY CASE AGAINST
JPM IN ASIA
WILL EXPAND. $$$

A group of regulators is expected to hit JPMorgan Chase, the perfect son, with
fines of at least $700 million
over its handling of the London
whale trading loss case in early
2012. The fines could be closer
to $800 million. Like with mortgage
bond investment fraud, home mortgage
contract fraud, and money laundering,
the big US banks merely chalk it up to business costs.
The Securities & Exchange Commision,
the Office of the Comptroller of
the Currency, the Federal Reserve,
and other USGovt official agencies
found that the bank lacked adequate
internal controls and monitoring
of its derivatives traders. Their
exposure was easily ten times what
the regulators observed during
their supposedly exhaustive investigation.
This type of derivatives trading
brought down Bruno Iksil. The big
beneficent bank attempted to cover
up the massive bad bets. They did
a very good job, because the official
recognized loss was declared at
$6 billion. The insider reports
indicate the losses to be closer
to $100 billion.

The USFed has been printing new worthless money to cover much of the JPMorguen
losses, keeping it all shoved under
oversized rugs. After all, JPMorguen
is the operating arm of the USFed
itself, in a tight collusive affiliation.
The current settlement is related
to charges brought against two
other employees, namely Javier
Martin-Artajo, supervisor to Iksil,
and Julien Grout, a subordinate
to Iksil. So far, Bruno Iksil has
received a pass and lives in comfort,
protected in his native France. The two men were
charged by US prosecutors in August
on criminal violations, with four
counts of conspiracy, wire fraud,
falsifying accounting records,
and causing JPMorgan to make false
statements in two securities filings
in 2012. The two men hid hundreds
of $millions of dollars in losses,
prosecutors alleged. Pretty funny,
since tens of $billions in losses
were actually hidden. See the Daily
Finance article (CLICK HERE).
At the same time, a minor additional
criminal detail, JPMorguen is reported
to be the object of an expanded
bribery investigation in Asia.
Consider it full spectrum dominance
in criminal banking enterprise.
See the Bloomberg article (CLICK HERE).
In time, JPMorguen could face a
global obstacle to do business
at all in foreign countries after
the next phase of the financial
collapse.

◄$$$ SAN BERNARDINO CALIFORNIA WILL RECEIVE BANKRUPTCY
PROTECTION. THE FAILURE OF CITIES
AND STATES WILL BECOME A FLOOD
IN THE NEXT PHASE OF THE ONGOING
CRISIS. NOTHING CAN STOP IT, SURELY
NOT THIS MYTHICAL RECOVERY. $$$

In the last week of August, a court granted bankruptcy protection to the California
city of San
Bernardino. The way is paved for
a creating a precedent in the battle
between bondholders and California's
giant public pension system. The
case is being closely watched by
other US cities, including Stockton, Detroit,
and Chicago, along with perhaps a dozen other cities. The US Bankruptcy
Court in California
ruled that San
Bernardino was eligible for Chapter
9 bankruptcy protection despite
opposition by the California Public
Employees Retirement System known
as CALPERS. The $260 billion pension
fund is the city's biggest creditor
and the nation's largest pension
fund. The city had to prove it
negotiated in good faith with creditors
to be eligible for bankruptcy.
The city of San Bernardino has a population of 210,000 and a current deficit of
$46 million. It is out of cash
to meet its obligations. The
complexity is apparent due to the
battle upcoming between pension
obligations and debt payments. California
state law says the fund must always
be fully paid, even in a bankruptcy. The
CALPERS crew extended $50 million
in pension obligation bonds. The
ultimate decision might be made
at the US Supreme Court, setting
precedent for other cities to follow.
The case: San
Bernardino, 12-bk-28006, US Bankruptcy
Court, Central District of California
(Riverside).

◄$$$ FINALLY, MOODYS WILL CONDUCT A DEBT REVIEW OF THE SIX BIGGEST BANKS
IN THE NATION. THE IMPACT COULD
BE CRIPPLING, AND FORCE THE BIG
US-BANKS TO PURCHASE MORE USTREASURY
BONDS. OR IT COULD KILL THEM, AS
INVESTORS MUST SELL THEIR BANK
CORPORATE BONDS SUDDENLY CAST BELOW
INVESTMENT GRADE. $$$

Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Wells Fargo,
and Citigroup are under renewed
scrutiny by Moodys. The big banks
are in the ratings agency crosshairs.
The justification offered by the
agency is as unusual as it is disturbing. They
reason the agency states is that
in the next financial crisis, the
USGovt is not likely to bail out
the big banks again, not after
the public outcry and broadbased
criticism for banker welfare, padded
executive bonuses, and stricter
obtrusive lending practices. Implicit
is a forecast of the next phase
of the ongoing crisis. See the
CNBC article (CLICK HERE).